A questionable proposition: Theorie Communiste’s bizarre theory of exploitation through the social product

by Jehu

1933: Beginning with the Great Depression, the fascist state began the practice of buying and slaughtering livestock and paying farmers subsidies not to plant crops.

As you probably have already noticed, I have been reading a lot from communization theory. After ignoring the tendency, it suddenly occurred to me that it is actually important. I have no apologies for my late turn. Sometimes I get it and other times things just go over my head. To make up for my previous error, I have been poring over a number of documents from the school.

One tendency I have noticed in the school is the stubborn avoidance of anything that smacks of Marx’s alleged ‘determinism’; which is to say the communization school is trying to argue for communization without invoking Marx’s labor theory of value. Like most Marxists today, TC seems to reject Marx’s labor theory, while trying to retain the power of his critique of the capitalist mode of production.

This approach appears to stem from the idea that Marx’s labor theory of value cannot account for the observed facts of post-war (and, in particular, post-1971) capitalism. The insistence on a non-deterministic critical approach leads to the sort of silly formulations as Theorie Communiste offers of a working class that can be “exploited through the product of their labour and not the sale of their labour-power.”

What TC is trying to account for with this bizarre formulation is the notion of Postone’s superfluous labor time. I figured I would give them some help. Hence this rather overly long post.

A questionable proposition

I have been reading this very interesting essay on communization by Theorie Communiste, “The suspended step of communisation: communisation vs socialisation

TC writes:

“The measures of communisation are the abolition of the proletariat because, in addition to its unification in its abolition, they dissolve the basis of existence of a multitude of intermediate strata (managerial strata of capitalist production and reproduction) which are thereby absorbed into the process of communisation and millions (if not billions) of individuals that are exploited through the product of their labour and not the sale of their labour-power.”

Let me see if I can restate this.

Communization is the abolition of the proletariat, because:

  • It ends the fragmentation of the proletariat;
  • It puts an end to the division of labor; and,
  • It absorbs billions who are ‘exploited through the product of their labor, not through sale of their labor power.’

I am fascinated by the third statement in particular. Who are these billions who exploited through the product of their labor, rather than by selling their labor power? What does it even mean to be exploited by the product of one’s labor? How does this happen?

Earlier in the essay TC states:

“Communisation is accomplished through seizing the means of subsistence, of communication, of transport and of production in the restricted sense.”

I thought that statement was odd when I first read it. Communization is accomplished through seizing the means of subsistence? It was an odd formulation, but TC added, “…of communication, of transport and of production in the restricted sense.” Based on the fact that TC included means of subsistence along with means of production, I passed over it. But then they came up with this novel theory that people can be exploited through the product of their labor. I had the sudden urge to demand they explain how this unique form of exploitation works.

Is exploitation through the social product possible?

After giving it some thought, however, I realized I had encountered this idea before, I just didn’t recognize it in this form.

This is actually the argument made by many Marxists for why capitalism can go on forever. This argument basically says that even if the entire proletariat was superfluous to the production of material wealth, capital would still be in control of all means of subsistence. The proletariat could still be compelled to work for wages even though its labor is actually irrelevant (or mostly irrelevant) to the production of material wealth.

I find this argument fascinating because it requires proof on two levels. Anyone making this sort of argument has to explain the mechanism by which a superfluous population of workers can create surplus value, which is what we mean by exploitation. How do workers who produce nothing create surplus value?

Then they would need to show that the proletarians are indeed superfluous to the production of material wealth. Clearly, this proof cannot be furnished by pointing to some unemployed workers and saying they are superfluous. Being superfluous to the production of material wealth is not the same thing as being unemployed. And proof cannot be furnished by pointing to workers doing bullshit jobs. Unnecessary labor is not superfluous labor. There are a lot of butlers and upstairs maids in this world, but this is not what we mean when we say superfluous labor.

Since workers who produce nothing cannot produce surplus value, TC seems to be trying to make an argument for a third category of labor that they have not shown can exist: labor that is superfluous to the production of material wealth, but necessary for the exploitation of the proletarians.

I think this is what TC is getting at when they speak of “millions (if not billions) of individuals that are exploited through the product of their labour“. The economic function of these proletarians literally is to consume the social product of their labor to keep capital alive. They consume the excess capital of society.

The problem with the idea workers can be exploited through the product of their labor is that it appears to contradict the law of value. If TC is to defend this idea, they have to show how it is possible within the premises of the labor theory of value. TC never accomplishes this task, so we are left with what appears to be an idea that violate labor theory altogether: the workers can be exploited through the product of their labor.

Let’s fix this for them.

Production and realization of surplus value

To begin with, let’s import an idea Marx made in Capital, v3, c15, in the form of a long, tedious quote:

“The creation of this surplus-value makes up the direct process of production, which, as we have said, has no other limits but those mentioned above. As soon as all the surplus-labour it was possible to squeeze out has been embodied in commodities, surplus-value has been produced. But this production of surplus-value completes but the first act of the capitalist process of production — the direct production process. Capital has absorbed so and so much unpaid labour. With the development of the process, which expresses itself in a drop in the rate of profit, the mass of surplus-value thus produced swells to immense dimensions. Now comes the second act of the process. The entire mass of commodities, i.e. , the total product, including the portion which replaces the constant and variable capital, and that representing surplus-value, must be sold. If this is not done, or done only in part, or only at prices below the prices of production, the labourer has been indeed exploited, but his exploitation is not realised as such for the capitalist, and this can be bound up with a total or partial failure to realise the surplus-value pressed out of him, indeed even with the partial or total loss of the capital.

According to Marx, then, the production of surplus value is only the first phase of the process of capitalistic accumulation. The second phase, once the surplus value is created, is that the surplus value now must be realized. If this realization phase is not completed, or if the product of social labor can only be sold at a price below its production price, a portion of the surplus value will not be realized. This can even lead to the partial or complete bankruptcy of the capitalist firm.

Let me suggest that, in the capitalist mode of production, the labor time required to produce a mass of value will always be less than the labor time required for its realization. In fact, as we know, this has to be true. The value produced by the worker must be greater than the value of her labor power or else surplus value would not be created in the first place. The labor time required to realize a mass of value will  necessarily be longer than the labor time required to produce the value.

In the short-run, there are a number of ways in which this imbalance is resolved — most importantly, expansion into the less developed regions of the world market. Eventually, however, this problem cannot be overcome within the limits of capitalist commodity production.

Labor without value

We know that although labor is the source of value, not all labor creates value. The expenditure of an hour of labor does not always create an hour of value. And it may not create any value at all.

The labor of a person who creates a use value for her own consumption in one example of this sort of non-value creating labor. The labor a slave performs for her master or the labor a serf performs for his landlord, creates no value at all, because the labor may create a use value, but the use value is not exchanged in the market; it never becomes a commodity. Labor without value creation is not of itself in contradiction to the law of value precisely because it may take place outside the domain where the law of value reigns.

Even labor within the domain of the law of value may not create value. Marx gives the example of a worker who spends more time creating a use value than is socially necessary. The additional labor time creates no value. It can even occur when all producers together spend no more time creating their individual use value than is socially necessary, but together spend more time in aggregate on those use values than is necessary. Finally, labor that creates no use value — the labor of a bureaucrat, politician or a soldier, for example — does not produce a single second of value, no matter its duration.

However, the scenario posed by TC seems a bit different to me. In this case, the labor expended by the worker is not only unproductive of value, but may actually be destructive of value. The exploitation of the worker is realized through the destruction of the product of labor. This would be akin to one worker being paid to grow a corn crop and deliver it to a silo, while another worker is paid to remove the corn from the silo and burn it. Something like this actually happened under the Agricultural Adjustment Act of 1933. Washington brought excess crops and destroyed them to maintain market prices.

This sort of value-destructive wage labor conceivably could go on for some time: first one worker grows the crops, while one worker burns the crops. Then one grows the crops, while two workers burn it. The more productive the labor of the worker growing the crop becomes, the more crop is produced and the more workers are necessary to burn the crops. Soon, one grows while three burn. Eventually, it takes 99 workers just to burn the crops grown by a single productive worker. Then two hundred. Then three hundred. The more the productivity of farm labor increases, the more workers it might take to destroy the excess crops to maintain prices.

The production of surplus value is only the first step in the overall process of capital. After the surplus value is created, now comes the second step: it must be realized as profit. (Capital, v3, c15.) If the excess crops cannot be sold, the state steps in and ‘purchases’ the excess at a price that is profitable. That is, through one fiction or another, the state removes the excess crops from the market and destroys it.

Paying wage workers to collect and destroy the crops completes the fiction. Eventually, the exploitation of the working class appears to hinge more on the unproductive consumption of the social product of labor than on its production. And this is because the exploitation of the working class comes to largely depend on the Keynesian “demand” for the surplus value created by destroying the excess capital.

Can absolute overproduction of capital happen?

The problem with this hypothesis is that it implies absolute overproduction of capital which, it appears, no post-war Marxist thinks can happen. In a condition of absolute overproduction, there is not just overproduction of crops, but too many farms (fixed capital) and too many farm workers (variable capital) turning out the crops. But how can we have too much capital in a society where there is so many unemployed farmworkers living in poverty?

The reason we can have impoverished farmworkers side by side with absolute overproduction of crops is that capital has nothing to do with production for needs of the farmworkers. The overproduction of capital means there is too much capital to produce for profit, not farmworkers. This problem cannot be fixed with more production, because production in this mode is solely aimed at production of surplus value, production for profit.

There is a second problem with this hypothesis however: it is so fantastic it requires proof. TC needs to establish that in fact “millions (if not billions) of individuals … are exploited through the product of their labour”.

How might we prove this fantastic assertion?

TC’s argument comes down to the assertion that many, (perhaps most), of the proletarians today do not actually create value through their labor. The specific function of this surplus population of proletarians within the division of labor is not to create value, but to consume the excess capital created by the exploitation of a relatively small population of productively employed proletarians. In turn, this implies that the wages of the surplus population of proletarians are not the product of their own labor time, but the product of the labor time of their productively employed counterparts.

This means we now have two pots of labor time: the first, being the labor time of the productively employed workers; the second being the labor time of the surplus population. The total labor time of the proletarians would be the sum of these two labor times.

By way of a concrete example, assume that this total labor time amount to 100 hours. Assume also that this 100 hours is evenly split between the two populations of workers. This means fifty hours of labor are productive of value, while fifty hours of labor time only consumes the excess product of the first group.

In this case, what is the sum value produced by the two groups of workers together?

It can be no more than the fifty hours of labor expended by the productively employed workers. Although the two groups of workers together have expended 100 hours of labor, they have produced only fifty hours of value. Whatever value is consumed by the surplus population of workers, it cannot exceed the value created by the productively employed workers. Both groups of workers must share in this fifty hours of value.

So, the question is this: how do we measure the value created during the 100 hours of labor?

We cannot see this value. Value cannot be directly observed. (Marx, v1, c1.) The value created during the total labor time expended by the two groups of workers will only be manifested (made visible to us) in the form of exchange value, i.e., in the form of the commodities for which the product of this 100 hours of labor is exchanged. The function of manifesting the value of commodities as exchange value falls to money. (“The first chief function of money is to supply commodities with the material for the expression of their values …”. Marx, v1, c3.)

No matter the duration of the labor time expended by the proletarians, the value of the social product created during this time will be expressed in some quantity of a money commodity. This is what money does. And no matter the actual hours of labor, the money commodity will only express that portion of the total duration of labor that created value. Which is to say, no matter that the workers together labored for 100 hours, the money commodity will insist only 50 hours of value has been created.

Labor power and wages

Although the total duration of labor is 100 hours, twelve workers, each working 8.5 hours, will nevertheless create only 50 hours of value, not 100 hours. Now this might happen because six of the workers are growing crops, while the remaining six workers burn it. It might happen because all the workers together grow too much crops to be sold profitably in the market. A third possibility is that six workers can slack off, while the other six work diligently. Finally it can happen that six workers actually grow crops, while the other six function as security guard, farm manager, HR director, office help, etc.

However, despite the fact that only six of the workers are actually creating value through their labor, all twelve workers are burning through their individual labor powers. The farm worker may burn through her labor power growing corn, but the office clerk is also burning through her labor power even if she produces nothing of value in the process. The expenditure of labor power has no direct relation to the production of value. It is possible to expend labor power without creating a single second of value.

The labor power of the office worker, no less than the labor power of the farm worker, must be replaced if it is to continue. It does not matter in the least that she produces nothing, the office workers must be paid just like her productive co-worker. The productive workers, who are the only ones creating any value, must create sufficient value to cover the wages of both productive and surplus workers together. The wages of both groups of workers together can never exceed the value created by the productive workers — fifty hours.

Moreover, we are speaking of the economic logic of the capitalist mode of production. Thus, by productive we mean productive of surplus value. The productively employed workers must, therefore, cover the wages of both the productive and unproductive workers plus an average rate of profit for the owner of the farm capital. Fifty hours of value thus accounts for both the wages of both productive and surplus workers and the profits of capital.

Superfluous labor time

In accounting for all the value created by the labor of the six productively employed workers, however, we are left with a huge residual of labor time amounting to fifty hours where nothing is being produced. How do we account for this massive expenditure of labor power during which nothing is produced?

To begin with, we know that the costs of production of this wasted labor time must be accounted for by the fifty hours of labor that are being productively expended in the capitalistic sense of that term. The wages of the productively employed, the wages of the unproductively employed and the profit of capital — are already accounted for. However, the value of the wages of the productively employed workers and the value of the wages of the unproductively employed workers by no means define the duration of the working day.

The duration of labor required to produce the sum value of the wages is one thing. How long this labor power can actually labor, its duration of expenditure, is quite another. The capitalist mode of production requires that the total duration of labor be greater than that required to simply reproduce the value of wages. The labor time beyond this limit (the value of the wages of both groups of workers) constitutes the surplus labor time of the proletariat; labor time they advance to the capitalist gratis as a condition for their employment. From this pot of surplus value we can deduct the average profit of capitals, that portion accruing to each capital relative to their employed capital.

These two sums — total wages of the working class and average profit of capital — are accounted for by the 50 hours of value producing labor.

Of course, the total labor time of society is not limited by the requirements of production that we can account for by the wages of the productive and unproductive (in the capitalistic sense) workers and the profits of capital. It is not just that no capital knows how much labor is materially required to meet the requirement of labor power and capital in advance, no capital cares about this material requirement. Each capital is only concerned with how much surplus value can be created and how much of this surplus value can be realized as profit.

It follows from this that the duration of labor time actually expended by the social producers has no relation to the actually needs of society — not just with regards to the needs of the social producers, but even with regard to the needs of the capital itself. There is no physical law that limits the total labor time of society to the material requirements of wage labor and capital. The limit is purely economic.

Superfluous labor time and end of commodity money

The labor time expended beyond this limit violates the premises of commodity production even in its capitalistic form. This labor time represents an actual expenditure of labor power, but it does not result in the production of value. Therefore, this duration of labor time cannot be manifested as exchange value; which is to say the product of this labor cannot be exchanged for a commodity money.

Why?

Since under the conditions I have posited above the labor time actually expended on production of commodities now exceeds the socially necessary labor time required for their production, the commodities must be exchanged for a sum of commodity money that exceeds the labor value actually contained in the commodity; or, to put this another way, the commodity money must be exchanged for less than its actual value.

In labor theory this cannot happen. As a general rule, commodity money will not be exchange for an object that has no value. (There are exceptions to this rule, of course — virgin land, etc., but these exceptions are explained by Marx.) As a general rule, for exchange to take place under the condition where money must be exchanged below its value, commodity production itself must break down.

Surprisingly, however, Marx doesn’t say such an exchange cannot happen as I described it above. Instead he predicts that it will eventually happen: production based on exchange value must collapse. Although Marx initially asserts commodities exchange at their values, he predicts this assumption of political-economy must eventually be violated.

(BTW: So far as I can tell, no book on Marx’s theory in circulation today even notes Marx made this prediction except to dismiss it. It is the most widely ignored prediction made by Marx in his entire theory.)