Monday, August 16, 2010

Marxist Theory of Exploitation, Explained...

Two Articles From Political Affairs.

The posting of these articles should not be interpreted an endorsement of the CPUSA, Political Affairs Magazine, or the author. These articles are being posted because of their simplistic analysis of Marxian economic theory, and nothing more.

You Might Be a Marxist If ... You Want to End the Exploitation of Workers

By David S. Pena

Capitalism exploits workers. Since the vast majority of people in our capitalist society have to work for a living, it’s no exaggeration to say that the majority of people in our country, and throughout the world, are exploited workers.

What does it mean to say that workers are exploited? In Marxist theory, exploitation means that workers are literally robbed by capitalists. Of course the capitalists never admit this. They claim that they pay their workers a fair day’s pay for a fair day’s work, that you’re paid for what you produce, no less and no more. But Marxists say that’s not what really happens.

The capitalists have set up a system in which they (the minority) own the machinery, factories, farms and other means of production needed to produce the necessities of life such as food, clothing, and shelter. The workers (the majority) usually have no other way to make a living than to sell but their ability to work. They have to sell this ability (their labor power) to the capitalists in order to earn wages. In other words, they have to get jobs. Wages are then used by workers to buy the products necessary to sustain their lives.

What is the value of your ability to labor? According to Marx, your labor power is worth whatever amount of money (or commodities) is necessary to keep you alive and working. That doesn’t sound like much of a life, but let’s go with that assumption and see what happens.

Imagine that you need to make $50 per day in order to feed, house, and clothe yourself. You find a job at an auto parts factory owned by a capitalist who agrees to pay you $50 per 8-hour day, or $6.25 an hour. Your day is spent making parts that the capitalist sells to one of the big automakers for $100 a piece, and you manage to produce 100 parts per day. Think about it—you are producing $1,250 worth of product per hour, $10,000 worth per day and $50,000 worth in a 40-hour week! Amazing isn’t it? You, the worker, have the ability to create a tremendous amount of value where there was none before. And it’s in the capitalist’s interest to get you to produce as much as humanly possible either by forcing you to work more hours in a day or making you work faster—preferably, for the capitalist, both.

But we need to get clear about something you might not have noticed. Remember that you are producing $1,250 worth of value every hour, which boils down to about $20.83 cents per minute. Is it really important to know that? Absolutely.

Here’s why it’s important. At $20.83 per minute, it takes about 2 minutes and 40 seconds for you to produce $50 worth of value. In other words, you have to work less than 3 minutes to produce the $50 that covers your salary. At this point, everything seems fair and square. You do $50 worth of work, and that’s exactly what you’re going to be paid. But don’t forget that you have to work 8 hours to get the $50 that it takes you less than 3 minutes to produce. That’s the catch, and that’s how you get robbed. In order for the privilege of working in that capitalist’s factory to get a measly $50, you have to agree to stay 8 hours and produce $10,000 worth of value, value that is stolen from you by the capitalist—literally stolen because the capitalist takes it without paying for it.

Capitalists constantly tell you that you’re getting paid for what you produce, that you’re compensated fairly for the time you put in, but in reality the capitalist can pay you for less than 3 minutes of work and force you to work over 7 hours of unpaid labor just to get that tiny paycheck. In our example, if you had been paid for what you produced, you would have made $10,000 that day. Think about your own situation at work and how it fits this example.

That 7-plus hours of unpaid labor time is called surplus labor, and it produced $10,000 in surplus value—surplus for the capitalist, not the worker! It’s as if you are paying the capitalist more than the capitalist is paying you. You are giving him unpaid labor time. The entire capitalist society is set up to make this look normal and fair, and the police, courts, and army are set up to enforce capitalists’ ability to exploit labor. Surplus labor, and the surplus value that it produces, is the source of capitalist profit. Thus the wealth of capitalist societies is based on the robbery of workers through forced, surplus labor.

Here’s a brief look at how exploitation was explained in some of the Marxist classics, which are still the best sources to read for a deeper understanding of this issue and other aspects of the conflict between capitalism and socialism. In Chapter II of Socialism: Utopian and Scientific, Frederick Engels wrote:

the appropriation of unpaid labor is the basis of the capitalist mode of production and of the exploitation of the worker that occurs under it; that even if the capitalist buys the labour power of his labourer at its full value as a commodity on the market, he yet extracts more value from it than he paid for; and that in the ultimate analysis this surplus value forms those sums of value from which are heaped up the constantly increasing masses of capital in the hands of the possessing classes.

Karl Marx’s Capital is the best source for an in-depth, technical explanation of labor exploitation under capitalism. In Capital, v. 1, chapter 9, Marx used the term “necessary labour-time” to designate the part of day during which workers labor to cover their own wages. He called the rest of the day, “the second period of the labour process,” in which the worker produces:

surplus-value which, for the capitalist, has all the charms of something created out of nothing. This part of the working day I call surplus labour-time, and to the labour expended during that time I give the name of surplus labour. . . . What distinguishes the various economic formations of society—the distinction between for example a society based on slave-labour and a society based on wage-labour—is the form in which this surplus labour is in each case extorted from the immediate producer, the worker.

Outraged by this extortion and want to put an end to it? Sounds like you’re a Marxist. Are you unconvinced and thinking of all kind of questions and objections? Stay tuned. They’ll be dealt with next month.

You Might Be a Marxist If ... You Want to End the Exploitation of Workers (Part 2)

By David S. Pena

Last month’s article discussed the exploitation of workers under capitalism, so let’s briefly review the main points of that discussion, and then we’ll consider some objections to the view that capitalism exploits workers.

Capitalists want to maximize profits, and they do this by exploiting the working class. The basic method of capitalist exploitation is to pay workers the lowest wage they can get away with (as close to mere survival as possible) while forcing their employees to do the maximum amount of work. More specifically, capitalists try to maximize the value they get out of you, in the form of the product or service that you produce, by increasing the period of time that you have to work beyond the time it takes you to produce enough to cover your wage or salary.

For example, last month we looked at an auto parts worker who was paid $50 per 8-hour day. That worker was able to produce $50 worth of product in approximately 3 minutes. Thus it took the worker an insignificant amount of time to produce enough value to cover the day’s wage. If you consider only those 3 minutes, it looks like an even exchange between the worker and the capitalist. The worker produced $50 worth of product and will be paid $50 in return. But don’t forget, our factory worker has to stay on the production line for a much longer time—another 7 hours and 57 minutes— just to get the $50. If this had been an even exchange, in which the wage equals exactly what the worker produces, the workday would have ended after those 3 minutes. But if that happened the capitalist wouldn’t make any profit, and maximizing profit is the whole point of capitalist production. Nearly $10,000 worth of surplus value was produced during the additional 7-plus hours that the worker was forced to remain at work. The capitalist steals this value from the worker; the worker is never paid for producing it. This theft of surplus value is what is meant by the term “capitalist exploitation.”

In Marxist theory, the amount of time you must work to cover your wage or salary is called necessary labor time. The time beyond that, during which you are forced to continue working in order to receive your wage, is called surplus labor time, and the value produced during that time is called surplus value. During surplus labor time you are working for free because the capitalist steals the time and the resulting product from you without paying for it. In order to maximize profit, capitalists try to minimize the amount of necessary labor time and maximize the amount of surplus labor time, so they can profit from the surplus value that results. That is why capitalists are always trying to keep wages as low as possible, extend the length of the workday, and increase through speedup the amount of work that you have to do in any given period of time. This intensification of work is what capitalists really mean when they speak so benignly about “improving productivity.”

The idea that workers are exploited and are literally victims of theft on the job gives rise to many questions and possible objections. Let’s look at a few of the most common ones.

“Exploitation does not apply to me because I don’t work in a factory.”

If you are one of the many workers who don’t labor on a production line, you might think that you are not being exploited. Does the Marxist view of exploitation apply only to factory workers? Consider a cashier in a supermarket, a clerk or secretary in an office, or a waiter or waitress in a restaurant or bar. It might not seem like it at first, but when you think about it, stores, offices, and restaurants are just like factories in the sense that they are business enterprises that produce and sell a physical product or a service—often both—in order to maximize capitalist profit. The type of business doesn’t really matter. In order to maximize profit, all businesses must exploit the ability of their workers to produce surplus value.

For example, a supermarket provides access to a large number of food products at one location, and it produces some products on-site such as specific cuts of meat, baked goods, and prepared dishes. It also provides customer service and an overall “shopping experience.” The produce department, meat department, canned goods, bakery, deli, and checkout lines are all stations on the supermarket “assembly line” that produces the shopping experience for the customer and the cart full of merchandise that rolls out the door at the end of the process. The cashier’s job is to complete the final step in the production process, which is a quick and accurate exchange of the customer’s money for the purchased goods.

Now if you’ve ever worked as a cashier you’ve probably noticed that the manager constantly adjusts the work schedule so that at any given time there are as few cashiers on duty as possible and everyone has to work at maximum speed just to keep up with the number of customers. Have you noticed that your workplace always seems understaffed and too hectic even though increasing the number of staff and slowing down the pace a bit would actually improve service? Ever notice that your manager gets very nervous whenever things slow down a little and the cashiers have a few minutes at their stations with nothing to do? That’s because the manager has to keep you working constantly and quickly for your entire shift. Don’t forget, management’s job is to minimize necessary labor time, the amount of time it takes you to produce enough value to cover your wage, and maximize surplus labor time, which is the amount of time you spend working for free in order to produce the profit that goes straight into the pocket of the capitalist. The period of surplus labor time get longer the faster you work, and the amount of surplus value you produce grows larger.

It makes no difference whether you work in a factory, office, supermarket, or restaurant. Capitalist exploitation happens in the same way and it happens to you just as much as any other worker. Think about this when you are at work and how it applies to your particular job. And remember it the next time your boss starts giving out prizes for “most items scanned per hour,” “most customers served per shift,” or “fastest typist.” Once you understand what’s really going on at your job, you will never look at work the same way again.

“None of this applies to me because I’m a college-educated white-collar worker earning a salary, not an hourly wage.”

It makes no difference whether you’re hourly or salaried, educated or uneducated. Here’s an example of how exploitation works in the white-collar world. I have a relative who’s employed as a social worker in a dialysis clinic that is owned by a transnational for-profit corporation that has clinics all over the globe. She has a master’s degree; she’s required to work 40 hours per week, and she makes $40,000 per year (about $19 per hour). According to the U.S. Census Bureau, per capita personal income in this country is around $39,750 per year. So she is making an average income, not great, but not terrible either.

How does that big corporation extract maximum surplus value from their white-collar employees? It’s very simple, they turn that average salary into a below average wage by bullying their workers and imposing enormous workloads that result in brutal speedup.

When our social worker started the job she was given a 40-hour workweek, but if you’ve ever worked in a salaried position that’s exempt from overtime pay, you know that you’re expected to work as many hours as it takes to get the job done. She soon found out that it was physically impossible to do all of the assessments, surveys, counseling sessions, applications for medical treatments and financial assistance, record keeping, data entry, transportation arrangements, and so on, in 40 hours. She’s been on the job less than a year and she started with 92 patients; that number quickly rose to 110, leaving her with less than 22 minutes per week to spend on each patient—and they keep adding patients and job requirements. She and her co-workers, the dieticians, social workers, and even the lower level managers, all find themselves in the same situation, and all are subject to constant threats and bullying from the bosses to keep up with their impossible workloads.

And here are the results of that exploitation. My relative routinely puts in 55 hours or more per week for the $40,000 salary for which she was supposed to work 40 hours per week. This lowers her hourly pay from $19 to about $14.55 per hour. This is well below the average hourly wage in the U.S., which according to the Bureau of Labor Statistics just happens to be $19 per hour. So much for that cushy white-collar job.

“I’m not exploited because I work in the public sector.”

Consider the public schools. As non-profit public institutions they do not have to extract profits from their employees or distribute profits back to capitalist owners. In that sense, there is no capitalist exploitation going on in the public school system. But we live in a capitalist society with a capitalist culture. Like islands in a capitalist sea, non-capitalist institutions are subject to capitalism’s attitudes and methods, and they must fight to survive in capitalist society. The capitalists would like nothing better than to privatize all public institutions so they can begin extracting all that untapped surplus value. Imagine how much profit they could make if teachers could be treated just like factory workers and students like customers.

That is why our public institutions are under constant attack from the capitalists who run our society. They hollow out our schools by imposing austerity budgets, and then they smear the schools in the media for the inevitable failures, failures that the capitalists engineered in the first place. And yes, you guessed it, their solution to these manufactured crises in public education and other sectors is always the same—privatization.

The pressure to privatize and to behave like capitalist enterprises permeates our public institutions. If you’ve ever worked in the public sector you’ve probably wondered why your bosses are always ranting that “If this place was a business it would go under!” or “We need to start running this place like a business!” And if you’re a public school teacher you’re probably wondering why classes are always too big, salaries are frozen, programs are being eliminated, and staff members cut—not just during economic crises, but always. Part of it is the influence of capitalist propaganda on ignorant and spineless administrators who can think of no better way to do things, and the other part arises from the pressing need to stretch the austerity budgets imposed by the capitalist society. So even though public institutions are not capitalist enterprises, they are increasingly run as if they are. Technically that’s not capitalist exploitation, but it sure feels like it to the worker.

“None of this applies to me because I belong to a union.”

Unions do not eliminate exploitation, but they do lessen its intensity and severity. By fighting for higher wages, better benefits, and more humane working conditions, they put some limits on the amount the capitalists can steal and they mitigate some of the more brutal methods of exploitation. But again, they do not end exploitation. The key to abolishing exploitation is to eliminate entirely the capitalists’ ability to steal the wealth that is created by workers. This will not be accomplished until our productive enterprises are taken away from capitalists and placed under a form of public ownership and control that distributes wealth through a democratic process designed to maximize the well being of the entire society. This form of society is called socialism, and unions will play a major role in achieving it. Socialism will be discussed in a future article.

“Exploitation is prevented by minimum wage laws and the 8-hour day.”

Like unions, such laws and regulations throw up obstacles to capitalist exploitation, but they do not put an end to it. Capitalists continue to exploit workers by packing more and more work into the 8-hour day, sometimes through sheer bullying and slave driving and sometimes with the help of computers, automated production lines, and other types of machinery. They also skirt wage and hours laws to such an extent that there are currently many millions of workers in our country who work for less than the minimum wage and for more than 8 hours a day.

“How can you say that I’m exploited when my boss doesn’t know a thing about necessary labor time, surplus value, or any of this theoretical stuff?”

The bosses don’t need to know a thing about Marxist economics, or even capitalist economics, in order to extract surplus value. All they have to do is keep you working hard all the time and keep finding ways to make you work even harder. That’s just the ingrained way of doing things in our capitalist society. Most of the time they don’t even have to think about it. But I guarantee you that somewhere back at corporate headquarters there’s an army of economists and accountants who know exactly what’s going on. They may not think about it in Marxist terms, but they know that the whole point of work is to keep you working for as long and as fast as possible for the lowest wage they can get you to take. They have it all down to a science. They know down to the second how fast to work you and down to the penny how little to pay you in order to maximize the surplus value that is extracted from your labor.

“How can you say we are exploited when people in other countries are so much worse off than us?”

In advanced capitalist countries such as the U.S. one can find broad swaths of poverty, despair, violence, exploitation, and human degradation that are as bad as anything in the world, but at the same time it is true that on average workers in advanced countries have higher material standards of living than workers in the less developed countries. Workers in the advanced countries are the most productive in the world, so the intensity their exploitation (the amount of surplus value that they produce per hour worked) is actually far greater than in most countries. But wages are higher in the developed world and methods of exploitation are not as physically harsh. This is due in large part to decades of struggles by organized labor and other progressive forces to lessen the brutality of exploitation and improve the living conditions of the working class. But the game is not up. Capitalists in the advanced countries are trying harder than ever to push living standards down as low as they can go. They’ve been very successful at this over the past 30 to 40 years. In the U.S., for example, they’ve gutted the labor movement, devastated the public schools, virtually eliminated job security and retirement pensions, rolled back government regulations, and kept real wages stagnant for the past 30 years. They still haven’t gotten us down to second and third world levels on the whole, but they’re working at it.

The other, uglier side to the relative but fragile affluence of workers in the developed countries is that capitalism is a global system designed to extract wealth from the rest of the world and put it in the pockets of capitalists in the advanced countries. Whereas workers in the developed countries suffer from exploitation, workers in the rest of the world are subject to super-exploitation. Capitalists in the developed countries have stolen such staggering amounts of wealth from workers in the rest of the world—through naked aggression backed by military force and other forms of exploitation too barbaric to attempt in their native lands—that they can afford to throw a few more crumbs to workers at home while they pillage workers abroad.

This brings us to the subject of imperialism, which will be discussed in next month’s article.

1 comment:

Mark Leonard said...

I like,em. Both articles make good reading for workers who are new to Marxism. I wouldn't so much call them "simplistic" as "simplified," and that in a good way.