Trillions in Capitalist Wealth: Where Does It Come From? by Justina
Recently, Forbes magazine, a major tool of the capitalist class, reported that the “Super Rich” are hiding $21 Trillion dollars in off-shore tax-havens. A single trillion dollars is a looooooooooo….t of money, and that amount pales besides the trillions the super rich are holding quite openly — in factories, equipment, office buildings, agribusinesses, stocks, bonds, derivatives and ownership of magazines like Forbes and all our media industries.
Where did all that vast wealth come from? Why are so many impoverished under our capitalist economic system, while the few gain such tremendous wealth? Karl Marx (1818 – 1883), Hegelian philosopher, political economist and practical revolutionary, asked that basic question and provided the most definitive answer to this very day in his study, Capital published in 1867.
So why does this old book strike such fear today into the hearts and minds of America’s corporate owners that they virtually forbid its teaching in American universities’ economics and business schools?
Some members of our Anti-Capitalist Meet-Up group hope to explore that question and the basics of Marx’s theories in a series of once monthly posts, of which this is the first, on surplus value.
We will explore other issues such as wages, profits and the falling rate of profit, accumulation of capital and the means of production, use value versus exchange value of a commodity, money as an intermediary between buying and selling commodities, alienated labor, private property, private versus state capitalism, finance capitalism and globalization, the role of cooperatives versus unions, finance capitalism and like issues. We’ll break it up into different diaries one a month. Maybe you’ll volunteer to write one too? (Please do!).
Economics Professor Richard D. Wolff (University of Massachusetts and the New School for Social Research) provides, in his four part series of lectures on the basics of Marx’s economic analysis. available on his web site, www.rdwolff.com, a solid, readily understandable and thoroughly enjoyable introduction to Marx’s economic theories which this writer uses as her departure point.
Wolff shows how Marx discovered, by analyzing its inner-most workings in detail, why capitalism is so de-humanizing and exploitative of its workers and produces such poverty and misery for the vast majority of the population. Marx’s analysis is set forth in his “theory of Surplus Value”, which is the secret to where all the trillions of wealth, both hidden and open, came from.
Professor Wolff places Marx’s work into its historical and intellectual context. Like other progressive intellectuals of his day, Marx was nourished on the slogans of the French Revolution of Liberté, égalité, and fraternité. He questioned why the transition from feudalism to capitalism had not brought the promised freedoms to the society.
Marx started out as academic philosopher of the Hegelian school, then applied Hegel’s dialectical method to analyzing the practical economic reality he saw around him. Writing between roughly 1840 and 1883, when the capitalist economic system was gaining total dominion over economic life and submerging the old European feudalism in the wake of the French Revolution of 1792. The aristocracy and the Catholic church were ousted from their hegemony, the industrial capitalists had taken over the reigns of economic and political power.
Professor Richard D. Wolff, in his lectures, demonstrates how Marx discovered, by analyzing its inner-most workings in detail in his work, Capital, why capitalism is so de-humanizing and exploitative of its workers and produces such poverty and misery for the vast majority of the population. Marx’s analysis is set forth in his “theory of Surplus Value” within “Capital”, which is the secret to where all the trillions of wealth, both hidden and open, came from.
Marx looked at the actual production process in the average factory of his day and saw that this is where the pernicious exploitation process of capitalism has its start and its motive force. The capitalists’ profits are generated from the stolen labor power of the workers.
First, the worker, no longer having land to farm as under feudalism, gives up his control over his own work day, selling his work day, his labor power, to the factory owner for a fixed sum, thus his labor has itself become a commodity. The owner, depending on the vagaries of the supply of available workers, pays the workers as little as possible for his labor time, hoping to extract as much labor as possible in return. In Marx’s time, 15 hour work days were not uncommon.
Let’s use a rug factory as our simplified example here to describe the process of extraction of this value. In a 10 hour work day, the weaver, using the power loom machines owned by the employer might produce 10 rugs. (The machines are one form of the “capital” owned by the capitalist.)
The owner, having bought the work day for sufficient to keep the worker fed and surviving, perhaps the equivalent of two rugs, now has 8 additional rugs to sell in the market. The capitalist owner has effectively appropriated 8 rugs of “surplus value” from the worker.
If he can, the owner will try to reduce the worker’s wage as low as he can, perhaps to the equivalent of one rug, but if there is shortage of workers in the town, he might be forced to pay the worker the equivalent of 3 or even 4 rugs, thus reducing the surplus labor he can appropriate. Workers with specialized skills likewise may be paid more than unskilled workers as their skills may be harder to find.
Once extracted from the worker, the capitalist owner is free to distribute the value of his 8 rugs anyway he sees fit, and those decisions may determine whether the business thrives or declines, depending on the vagaries of the market and/or his competition in the rug business, but the theft of the surplus labor is complete upon the end of the working day for the worker.
The worker’s labor has produced much more than he has been paid, that is the “surplus” in the Theory of Surplus Value.
Marx focused on the extraction of surplus value under capitalism because that was the critical aspect which determines all the other consequences and machinations. It is precisely from this stolen surplus labor that the trillions of dollars in wealth owned or controlled by the wealthy, the big corporations or even the State, derive. It is simply the surplus value that has been accumulated over time as savings or turned into newer and bigger factories, machines, corporations.
Living human labor is the only source of value and the human being is the only “machine” from which the capitalist can extract a surplus. The capitalist may buy a new machine to add to his fleet of machines (his “means of production”), but that machine has a fixed price and a fixed operable “life”. The owner cannot extract more use from that machine than it was designed to produce and what he paid for it.
A worker, on the other hand, can be made to work for forced over-time, forced to produce 15 rugs in a 15 hours day rather than 10 in a 10 hour day, or, with a superior machine, to produce 15 rugs rather than 10 in the 10 hour work day, at relatively little more cost to the owner.
But the pernicious nature of capitalism extends beyond the mere economic deprivation suffered by the workers, its process of depriving the worker of the use of his mind and creativity, depriving him of control over the conditions of his work, depleting him of the energy to live a fully human life.
Thus, in the auto industry in Detroit in its heyday, the workers not only had to work “forced” over-time, but the speed of the assembly line was increased as much as possible to likewise increase the surplus produced. Recently, with the help of the federal government and the UAW auto union, the company was allowed to pay new workers less than the former “union wage”, obviously increasing the amount of surplus value and thus profits available to the employer, a process that not only diminished the wages of the workers, but the very power of their union to protect them.
Clearly, putting a few workers on the board of directors of a company or giving workers minority shares of company stock will not fundamentally change the capitalist production process, nor will mandating that corporations give a certain percentage of their profits to charity, even expropriating companies and titling them in the name of the state will not do so– or any of the other schemes that are touted in the attempt to make capitalism kinder or more equitable, none of this abolishes the extraction of surplus value, and thus capitalism exploitation and all the evils that flow from it, continues a pace.
Capitalism steals not only surplus value from the worker, but his very humanity, his energy, his autonomy, his right to think creatively, to determine the conditions of his work life, the right to be treated as a whole human being with a body and a mind.
In Detroit in the 1950’s and 60’s, the union fought only for higher hourly wages or related financial benefits while the rank and file workers were fighting for their humanity, for control over the speed of the assembly line and an end to forced over-time.
These workers wanted better and more humane working conditions, not merely more money. They objected to being turned into commodities themselves which were thrown away when their useful work lives were ended. They objected to the fact that they were treated as things, not thinking, creative human beings.
For more voices direct from the auto assembly lines see the excellent booklet, Workers Battle Automation written by Charles Denby, a Black auto worker and editor of Marxist-Humanist newspaper, ” News & Letters” , detailing the struggles of auto assembly line workers in Detroit in the 1950’s and 1960s.
Workers Battle Automation described in detail and the fight against the constantly increasing speed of the assembly line. Obviously, by speeding up the assembly line, the bosses could increase the number of cars produced per hour, and thus the amount of surplus value extracted from their workers. See also Denby’s autobiography,http://www.amazon.com/INDIGNANT-HEART-Charles-Denby/dp/0919618936. Indignant Heart., as well as his editorials published by News & Letters and preserved in their archives..
It is only when the workers in a given factory or workplace join together to re-appropriate the previously stolen labor in its machines and buildings, join together to decide what to produce, how it will be produced, and how the proceeds will be distributed that their labor can cease to be a commodity, cease to be alienated from them. It is critical to break down the division of mental and manual labor in the work place so that all the workers, democratically, control the conditions of their labor and the distribution of its proceeds. It is crucial to abolish capitalist production and its consequences and create a human basis for not only production of goods but for our human communities.