The Exploitation of Labor

The U.S. is a capitalist society in which a small class of people, the capitalists, own the factories, mines, land, etc. (These are called the means of production because it is with these means that almost everything of value in society is produced.) Another class of people, the workers (the majority), own no means of production. They have no way to produce what they need to live, except to hire out to the capitalist employers. They must work for the capitalists or starve. The capitalists exploit the workers, that is, they live off the profits created by the labor of the workers. In this process, the workers grow poorer while the capitalists grow richer.

In order to further their struggle against the capitalists, the workers must understand the source of their exploitation and the conditions for putting an end to it. This is the subject of this article.

In our economy, the overwhelming mass of goods are produced for exchange, for sale, instead of for use by those who produce them. Goods produced for exchange are called commodities. For example, the cars produced by the workers at General Motors are made for exchange; they are not produced for the direct use by the autoworkers who made the parts and put them together. Or, to take another example, the great mass of food that is grown by the farm workers is not for their direct consumption. Only a small amount of food is consumed directly by the farm hands who grow it.

Commodities must be exchanged for each other to satisfy the many wants of the members of society. Commodities are exchanged for others according to their value. But what is the source (that is, the substance) of this value and what determines the amount of value in a given commodity? The substance that gives commodities their value is labor. Value is created by human labor. The more labor used to make a commodity, on the average, the more value it has. And in turn the less labor, on the average, used to make a commodity, the less value it has. Therefore, the average time needed in a given society to produce a commodity determines the value of the commodity. For example, the value of a car is determined by the amount of labor time it takes, on the average, for the workers to produce it. This includes the labor time of the autoworkers who build the car from steel, rubber, glass, etc.; plus the labor time it took other workers to produce the steel, rubber, etc.; as well as a portion of the time that was needed to build the machinery, factory, etc. used in the production of the raw materials and assembly of the cars.

When commodities are exchanged, their relative value is not measured directly by the number of hours it takes to produce them. Rather their value is measured indirectly, by comparing them to another commodity which has developed historically as a measure of value - money. Because gold is a commodity and was regularly and almost universally used as the measure or expression of the value of commodities, gold became money. Today, paper money is used as a symbol representing the actual money commodity, gold.

The value of a commodity expressed in money is its price. Commodities are sometimes sold below their value and sometimes above their value, but the average price of a commodity in the long run is equal to its value.

The capitalist hires workers to produce commodities, which he then sells for a profit. The sole aim of production is to reap maximum profits for the bosses. As the workers toil, they use their physical and mental abilities. This ability to work is called labor power. Under capitalism, the worker sells his labor power to the capitalist, who consumes it. That is, labor power itself becomes a commodity - something produced for exchange, for the use of others. How is the value of labor power determined? As with any commodity, its value is determined by the amount of labor time needed to produce it. For the commodity labor power, this means the amount of labor time needed to produce all the means of subsistence for the workers and their families - food, clothing, shelter, transportation, education, etc. The worker does not exchange his labor power directly for these goods. Instead, like other commodities, the value of labor power is measured or expressed in terms of money. In exchange for their labor power the workers are paid an amount of money equal in value to the goods which they need to live; this amount is called wages. This is the price of the commodity labor power. With this money, the workers purchase what they need to maintain themselves. Like all other commodities, labor power is sometimes sold above or below its actual value. But for the many workers who have the misfortune of temporarily selling their labor power below its value, life is extremely unbearable.

The hired laborers are now set to work with the means of production, the raw materials and machinery, provided by the capitalist. Moving and twisting according to a plan, the workers toil. Their brains, sweat and blood convert the raw materials into a finished product. In this process, a certain amount of new labor is absorbed and incorporated into the final product. We can visualize this process easily, if we see how coal is mined.

The miners, for example, dig coal with the aid of machinery. While they work, two things happen simultaneously: new value is formed and incorporated into the final product (remember value is created by the expenditure of human labor power); and old value (in the form of machinery lost to wear and tear, etc.) is transferred to the new product--a mound of coal.

We know that today a group of 10 miners working an 8 hour shift can produce, on the average, about 200 tons of coal. This mound of coal would be worth about $5,102. These ten workers would be paid about $1,220 in wages, on the average, for this work (including cash wage, health insurance, pension, training, etc.). Assume the value of means of production used up is $2,662. The 200 tons of coal has cost the capitalist $1,220 in wages and $2,662 in auxiliary materials and machinery, or $3,882 in all. But the capitalist sells the coal for $5,102, or $1,220 more than it cost him. Where do these extra $1,220 come from?

The $5,102 average price must equal the value, or the amount of labor embodied in the coal. But $2,662 (the value of the means of production) was already there before the miners began to work. So the other $2,440 has been added to the value of the raw materials and machinery by the fresh labor of the miners. But the wages of these workers only amounted to $1,220. So, beyond the value of their wages, the miners have produced another $1,220 in extra value, or surplus value, and this is taken by the capitalist. Each miner working a regular shift is paid $122 for 20 tons, but he adds new labor valued at $244.

Part of the wealth produced by the workers goes to pay their own wages; the other part becomes the profits of the capitalists.

The labor power of the worker is a commodity under capitalism, but a commodity of a very special kind. When it is put to use, that is, when the worker is set to work, he creates value. And he creates not just value, but more value than it takes to sustain him. That is, the value created by the laborer ($244 for 1 work day in this example) and the cost of maintaining this laborer ($122 for 1 day) are two completely different amounts. The difference between them is the surplus value. If we divide the surplus value by the value of the labor power (wages) we get the degree to which the miners are exploited by the mine owners. In this case ($122/$122) it is 100%. This means that the miners spend one half of their working day replacing the value of their means of subsistence and one half producing the profits of the bosses. The degree of exploitation is made to look smaller when the mine owners calculate the rate of profit. They divide the surplus value ($1,220) by the total capital advanced ($2,662 + $1,220 = $3882) and get a mere 31%.

During part of the workday a worker labors to produce the value of his wages. He is not paid for the rest of the day during which his labor produces profits for the capitalist.

As we stated before, we can express the relative proportions of the new value (created by the worker) which go to the capitalist and to the worker in terms of a division of the working day. In the case of our miners, we have a work day of 8 hours. By our calculations, it takes them only 4 hours, with present technology, to produce the value of their wages. The capitalist gives an equivalent for this value - the worker is paid wages. But the rest of the work day, the other 4 hours or more, the miner produces surplus value. Because the capitalist does not give him an equivalent for this work, the miner performs unpaid labor. The boss gets wealthy by accumulating unpaid labor.

As the capitalist seeks to increase his profit (unpaid labor), he always presses to increase the hours in the working day and reduce the cost of labor power. This takes many forms including overtime (voluntary and forced), outright pay cuts, speed-ups and increased productivity.

It is also clear at this point that some high paid workers are exploited, since they too produce a value greater than the value of their labor power. If all other conditions remain the same, the higher the wages, the lower the rate of exploitation. Similarly, the nationality, race or sex of the capitalist who hires the workers makes no difference. So long as the worker produces a value greater than the cost of his or her labor power, that worker is exploited, regardless of the size of the capitalist enterprise or the sex, nationality or race of the capitalist owner who appropriates the surplus value.

The drive for maximum profits is the basic law of monopoly capitalism today. The exploitation of the worker is the basis of the class struggle between the worker and the capitalist. The worker and capitalist, necessarily, fight over who gets the values created by the labor of the workers. Consequently, the interests of the workers and the capitalists are not reconcilable. One always gains at the others expense.

What does the industrial capitalist do with the surplus value that he exploits from the labor of his workers? A part of it goes to the banker as interest on loans and a part goes to the landlord for the use of land, as rent. Of course, some of it goes for his personal consumption. But he can only spend a certain amount on yachts, mansions, expensive jewelry, mink coats, etc. The rest, and the significant portion for capitalist production, is reinvested in expanded production. That is, the capitalist uses some of the surplus value to buy more raw materials and machinery, and hire more workers. This is called accumulation of capital, since the capitalist uses the surplus value to increase the value of his original capital. Through this accumulation of capital, what the worker produces is turned by the capitalist into means for increasing the worker's own exploitation. The increasing use of machines leads to displacement of workers, unemployment and growing poverty of the workers. In this way, the rich get richer and the poor get poorer. But at the same time, the expansion of production increases the concentration and organization of the workers themselves. This provides the basis for the workers to eventually overthrow the capitalists and put an end to their exploitation. (This is what Karl Marx meant when he said capitalism creates its own grave diggers.)

All class societies have been based on the exploitation of one class by another. It is the form of this exploitation that has distinguished one form of class society from another. So, in slave society (both in the ancient world and in the pre-Civil War U.S.), the master owned the laborer, the slave. It seemed as if all the slave produced went to the master. But actually the master returned to the slave the bare minimum necessary for the slave's livelihood. Thus, the master lived off the surplus labor of the slave, labor over and above that minimum needed for the slave to survive.

Feudal society was based on the landlord's ownership of the land. The serf worked the land, spending part of the time working on his own land and part of the time working on the landlord's land. Here the division of labor time into that necessary for the serf's survival (the time he worked his own land) and the surplus labor time (the time he worked the lord's land) was clear.

Under capitalism, the exploitation of labor is more disguised than under the earlier systems. For here there is no visible distinction between the part of the day in which the worker produces the equivalent of his wages, paid necessary labor, and the part of the day in which he carries on unpaid, surplus labor for the capitalist. The distinction between necessary and surplus labor is concealed by the payment of wages. It appears that the worker is paid for all the value he creates with his labor when, in fact, the capitalist receives the lion's share of the product.

Under feudalism, the masses of people were serfs who worked on the land of the landlords. Others were small producers, either peasants who worked on their own land, or artisans who produced handicrafts by their own labor. With the development of the capitalist system, the peasants were forced off the land and stripped of the means of production by the capitalist landowners. This happened to both serfs and independent peasant owners. The artisans also could not compete with the products of capitalist industry and were eventually dispossessed. So the peasants and artisans were unable to live by their own labor. They had nothing to sell but their labor power. They had to sell their ability to work to the capitalists and became workers - proletarians. This process is still going on today, as small farmers are ruined by competition from the agricultural monopolies, or small store owners are forced out of business. They, too, become transformed into workers.

The workers under capitalism are free in a two-fold sense. First, unlike the slaves or feudal serfs, the workers are not tied to a slave master or landlord. They are free to sell their own labor power and to move from one factory or region to another. Second, the workers are free from having anything to sell besides their labor power. They are free not to grow food, free of the materials to produce clothes, etc. This "freedom" is what forces them to sell their labor power to the capitalists.

Capitalism has developed extremely advanced techniques of production compared to earlier forms of society. This means that it takes even less labor time than earlier for the laborer to produce the equivalent of his own means of subsistence. So the amount of surplus labor that is produced is much greater than in earlier times. This is what has allowed for the great expansion of production under capitalism. This is true despite the fact that capitalism can not even provide the bare means of livelihood for so many millions of people, both in the U.S. and around the world. This is part of the contradiction between the social nature of production (with workers organized together into thousands, using highly developed machinery, to produce all the necessities of life) and the private ownership of the means of production (with all these factories, machines, etc. owned by a few individuals who carry on production only for their own profit).

Capitalist exploitation will last as long as the capitalists continue to own the means of production. To put an end to this exploitation, the workers must carry out the socialist revolution and take the means of production from the capitalists. The capitalists' state must be smashed and replaced with a workers' government - a dictatorship of the working class - to crush any attempts of the former exploiters to come back to power. Then socialist production will be organized for the material and cultural benefit of all the working people (not for the profit of a few capitalist parasites). But this is the subject for other articles, which have and will continue to appear in the pages of Labor's Champion.

Bibliography:

• Karl Marx, Capital, Vol. I, Chapters VI and VII
• A. Leontiev, Political Economy, Chapter IV (pp. 79-92)
• Frederich Engels, Introduction to Marx's Wage Labor and Capital

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