Relations of Exploitation (Valorisation)

Marx undertakes a sophisticated analysis in the first five chapters of the Capital volume one, in order to reach the conclusion that commodities do not create surplus-value by themselves; in other words, they do not valorise themselves but, rather, surplus-values are created by labour power (see Marx [1867] 1990: 268–80). Marx started his analysis on the capitalist mode of production by stating the argument that any commodity in the marketplace has a dual character: a use-value (i.e. an object of utility) and an exchange-value (i.e. the commodity itself is a material bearer of values) (Marx, [1867] 1990: 125). What determines the value of a commodity is the labour time socially necessary for its production.7 _This

implies that the exchange-value of a commodity is a representation of the commodity’s value itself;8 _{hence, it is a representation of the labour time socially necessary for its production.}

Therefore, the more socially necessary labour time is required to produce a commodity, the more value it has.9 _{This implies that useful commodities have values because human labour}

power is objectified/materialised in them (Harvey, 2017).

What distinguishes the commodity of labour power from all other commodities in the market is its capacity to generate more value than the cost of its reproduction (i.e. the value of labour power in the form of wage). What is key here is the recognition that the difference between these two values is what capitalists exploit to generate surplus-value, as shown in figure 3.2 below.

Figure 3. 2: Valorisation

Source: Author, based on Marx ([1876] 1990)

7 _{Socially necessary labour-time was defined by Marx ([1876] 1990: 129) as ‘the labour-time required to} produce any use value under the conditions of production normal for a given society and with the average degree of skill and intensity of labour prevalent in a society’.

8 _{It should be noted that there are different interpretations among Marxist theorists on how demand} determines the value of commodities (see for example, Kristjanson-Gural, 2017: 155).

9 _{What distinguishes Marx from Ricardo is this definition: Ricardo considered that labour-time determines} the value of a commodity, whereas Marx used socially necessary labour-time as the value’s determinant.

Worker Labour-Power Use-value Value Capitalists exploitation of the difference between values Effort Pay Surplus-value

Exploitation in Marxist terms can be defined as ‘the appropriation by capital of a share of the value produced by the labourers’ (Carchedi, 2017: 45). For Marx, exploitation does not occur at the moment of sale and purchase of labour power, but because workers are forced to work longer hours and/or work at a higher intensity that is above and beyond what they need to reproduce themselves. From this perspective, exploitation increases with the increase in the amount of socially necessary labour time that workers give to capitalists without remuneration.

Figure 3. 3: Exploitation

Source: Adapted from Marx ([1867] 1990: 429)

As shown in figure 3.3 above, Marx ([1867] 1990) divided the working day into two parts: the line from A to B is necessary labour time and the line from B to C is surplus labour time. Workers start their working day at point A and work for a specific amount of time until they reach point B, where the amount of value they have added to the commodities is equivalent to the value of their own labour power, which is the cost of the means of subsistence (i.e. the wage). After point B, workers are adding surplus-value, which capitalists take as a reward. For example, if a labourer works eight hours per day but his/her value of labour power is covered at the first five hours, he/she ends up working three hours for free, which is the period of creating surplus-value for the benefit of capitalists. The example above shows that valorisation depends on the capitalist ability to extract labour from labour power, which mostly occurs by extending the working day to produce absolute surplus-value and/or increasing labour productivity to produce relative surplus-value (Marx, [1867] 1990: 429– 38).

The creation of surplus-value, in both its forms (absolute and relative), is determined by three interlinked factors: the length of the working day, the intensity of the work and the value of labour power. When an employer increases the length of the working day, the best

Duration of the working day

A--- B ---C . Necessary Labour Time Surplus Labour Time Necessary labour-time Surplus labour-time

labourers create absolute surplus-value. Likewise, when the intensity of work is increased (e.g. as a result of introducing new technology and inter-firm competition), productivity10

increases, which results in the additional creation of relative surplus-value. More importantly, the increase in productivity implies a decrease in the value of labour power since higher productivity secures higher quantities of goods and services at lower prices (Harvey, 2017).

Nevertheless, capitalists only buy (i.e. recruit) the socially necessary skills of labour power for production. Unskilled labourers cause delays in the labour process and/or a waste in the means of production that capitalists purchased. Likewise, overqualified labourers have higher costs but cannot produce faster or more than what the required level of skills is; thus, they constitute an extra expenditure (Marx, [1867] 1990: 304–5). As Thompson and McHough (2009: 216) point out, however, ‘a focus on skills in isolation from the broader division of labour is conceptually and empirically limited’.