Capital, Volume I - Part Three: The Production of Absolute Surplus-Value

Part Three: The Production of Absolute Surplus-Value

In Part Three of Capital Volume I, Karl Marx explores the production of Absolute Surplus Value. To understand this one must first understand the labor process itself. According to Marx, the production of absolute surplus value arises directly out of the labor process.

There are two sides to the labor process. On one side there is the buyer of labor power, or the capitalist. On the other side there is the worker. For the capitalist the worker possesses only one use-value, that of labor power. The capitalist buys from the worker his labor power, or his ability to do work, and in return the worker receives a wage, or a means of subsistence.

Marx says this of the labor process: "In the labor process, therefore, man's activity, via the instruments of labor, effects an alteration in the object of labor…. The product of the process is a use-value, a piece of natural material adapted to human needs by means of change in its form. Labor has become bound up in its object: labor has been objectified, the object has been worked on" The labor that the worker has put forth to produce the object has been transferred to the object, thus giving it value.

Under capitalism it is the capitalist who owns everything in the production process such as: the raw materials that the commodity is made of, the means of production, and the labor power (worker) itself. At the end of the labor process it is the capitalist who owns the product of their labor, not the workers who produced the commodities. Since the capitalist owns everything in the production process he is free to sell it for his own profit. The capitalist wants to produce: "An article destined to be sold, a commodity; and secondly he wants to produce a commodity greater in value than the sum of the values of the commodities used to produce it, namely the means of production and the labor-power he purchased with his good money on the open market. His aim is to produce not only a use-value, but a commodity; not only use-value, but value; and not just value, but also surplus value."

The goal of the capitalist is to produce surplus value. However, producing surplus value proves to be difficult. If all goods are purchased at their full price then profit cannot be made. Surplus value cannot arise from buying the inputs of production at a low price and then selling the commodity at a higher price. This is due to the economic law of one price which states "that if trade were free, then identical goods should sell for about the same price throughout the world". What this law means is that profit cannot be made simply through the purchase and sale of goods. Price changes on the open market will force other capitalists to adjust their prices in order to be more competitive, resulting in one price.

So, where does surplus value originate? Quite simply, the origin of surplus value arises from the worker. To better understand how this happens consider the following example from Marx's Capital Volume I. A capitalist hires a worker to spin ten pounds of cotton into yarn. Suppose the value of the cotton is one dollar per pound. The entire value of the cotton is 10 dollars. The production process naturally causes wear and tear on the machinery that is used to help produce the yarn. Suppose this wearing down of machinery costs the capitalist two dollars. The value of labor power is three dollars per day. Now also suppose that the working day is six hours. In this example the production process yields up 15 dollars, and also costs the capitalist 15 dollars. Thus there is no profit.

Now consider the process again, but this time the working day is 12 hours. In this case there is 20 dollars produced from the 20 pounds of cotton. Wear and tear on machinery now costs the capitalist four dollars. However, the value of labor power is still only three dollars per day. The entire production process costs the capitalist 27 dollars. However, the capitalist can now sell the yarn for 30 dollars. This is because the yarn still holds 12 hours of socially necessary labor time in it (equivalent to six dollars).

The key to this is that workers exchange their labor power in return for a means of subsistence. In this example, the means of subsistence has not changed; therefore the wage is still only 3 dollars per day. Notice that while the labor only costs the capitalist 3 dollars, the labor power produces 12 hours worth of socially necessary labor time. The secret of surplus value resides in the fact that there is a difference between the value of labor power and what that labor power can produce in a given amount of time. Labor power can produce more than its own value.

So, by working on materials during the production process the worker both preserves the value of the material and adds new value to the material. This value is added because of the labor that is necessary to transform the raw material into a commodity. But, according to Marx, value only exists in use-values, so how does the worker transfer value to a good? It is because "Man himself, viewed merely as the physical existence of labor power, is a natural object, a thing, although a living, conscious thing, and labor is the physical manifestation of that power." In order for commodities to be produced with surplus value two things must be true. Man must be a living commodity, a commodity that produces labor power, and it must be the nature of this labor power to produce more than its own value.

When capitalists begin production they initially spend their money on two inputs. These inputs can be represented with the capital advanced equation: ; where C is capital advanced, c is constant capital, and v is variable capital. Constant capital is nothing more than the means of production (factories, machinery, raw materials, etc.). Constant capital has a fixed value which can be transferred to the commodity, though the value added to the commodity can never be more than the value of constant capital itself. The source of surplus value comes instead from Variable capital or labor power. Labor power is the only commodity capable of producing more value than it possesses.

The accumulation of capital occurs after the production process is completed. The equation for the accumulation of capital is '. Here C' is the value created during the production process. C' is equal to constant capital plus variable capital plus some extra amount of surplus value (s), which arises out of variable capital. Marx says that surplus value is "merely a congealed quantity of surplus labor-time… nothing but objectified surplus labor."

To better understand the rate of surplus value one must understand that there are two parts to the working day. One part of the working day is the time necessary in order to produce the value of the workers labor power. The second part of the working day is surplus labor time, which produces no value for the laborer, but produces value for the capitalist. The rate of surplus value is a ratio of surplus labor time (s) to necessary labor time (v). The rate of surplus value (s/v) is also referred to by Marx as the rate of exploitation.

Capitalists often maximize profits by manipulating the rate of surplus value, which can be done through the increase of surplus labor time. This method is referred to as the production of absolute surplus value. In this case capitalists merely increase the length of the working day. Though there are physical restrictions to the working day, such as general human needs, the working day is by no means fixed. This allows for great flexibility in the amount of hours worked per day.

This flexibility in working hours leads to a class struggle between capitalist and worker. The capitalists argue that they have the right to extract all of the value from a day's labor, since that is what they bought. Similarly, the worker demands the full value of his own commodity. The worker needs to be able to renew his labor power so that it can be sold again anew. The capitalist sees working fewer hours as theft from capital, and the worker see working too many hours as theft from laborers. This class struggle can be seen throughout history, and eventually laws were put in place to limit the length of a working day. This forced capitalists to find a new way in which to exploit workers.