Marxist Economic Theory: Capital, Labor, and Value
Capital Accumulation and Its Consequences
The capitalist invests surplus in the means of production and wages, thus becoming a new capital. Therefore, it increases the existing capital: capital accumulation occurs. This leads to capital concentration and centralization, causing capitalism to fall into a vicious circle. For Marx, competition in production is due to the lowest price. The lowest price results from high work performance, and he resolves to use more powerful machines and more sophisticated shops, therefore requiring a larger capital. Hence, the need to accumulate at an increasing rate arises. However, the more you build up the machines, the more the number of workers decreases proportionally, and the smaller the proportion of variable capital (labor) in relation to constant capital (machines, facilities, etc.).
This is the law of capitalist accumulation, as enunciated and demonstrated by Marx: with increasing capital accumulation, a growing number of surplus workers for the system is necessarily produced and reinforced. This creates a supernumerary population forced to survive in precarious conditions. This explains that as capital accumulates and produces wealth, there is also a growing accumulation of misery in the majority of the population. The accumulation of capital is equivalent to the accumulation of misery.
Infrastructure and Superstructure
Infrastructure is the set of relationships formed by the modes of production, distribution, exchange, and consumption that constitute the economy of capitalist society. The development of this economic base is a fundamental factor in dialectical historical events and is composed of the following interacting elements:
- The means of production: The object on which you work and the work environments, ranging from those directly involved in the transformation to those essential to achieving it.
- Production relations:
- Production techniques: Those established between the agent of production and the means of production in the work process.
- Social relations of production: The relationships established between the owners of the means of production and workers. These relationships are conflictual and antagonistic, and their historical development has included slavery, servitude, and capitalist exploitation.
The superstructure is the set of ideas that shape social consciousness in their legal-political forms and institutions, rules, and laws regulating society. It also includes ideological forms, such as the ideas and beliefs that form social consciousness, like religion and philosophy. The structure or economic base of society determines and generates the corresponding superstructure, following the process of historical materialism and dialectics.
Capital Gain: Understanding Surplus Value
The capitalist owns the means of production. The worker produces goods for which payment is made in the form of a salary. To achieve capital gains, the capitalist pays for “workforce,” which is part of the time worked. The rest of the time is unpaid. This unpaid time is what is called capital gain, the benefit to the capitalist.
The salary is equivalent to work performed by a worker for only part of the working day. Therefore, it is clear that wages are lower than the value produced by the worker during their entire working day. This difference in value is referred to by Marx as surplus value. Wage labor represents only a portion of the working day; the other part of the day’s work is unpaid work, and that is the secret of surplus value.
To increase the added value, the capitalist seeks to increase and maintain the working day as long as possible to increase, in absolute terms, the difference between paid and unpaid work. This capital gain is therefore called absolute surplus value by Marx. Then, the capitalist seeks to increase relative surplus value by increasing the speed with which the worker produces goods and reducing the time required. This decreases the value of the labor force and unpaid work time, although the working day is maintained constant, changing the ratio between paid and unpaid work. This is why Marx called it relative surplus value.
Labor: The Essence of Human Activity
For Marx, work is the creative activity of man’s productive property. It is not merely knowledge or contemplation, but productive, creative work. Through work, man develops their productive activity and is projected onto the products of their labor. Something of their being is put into every product; ultimately, the product of the worker has a human face. By expressing themselves in the wild, man “humanizes” it; the personality of the worker is registered in the product. However, Marx argues that work in the capitalist economic system is alienating.
Value: Use Value and Exchange Value
The goods produced have a value at which they can be purchased in the market. This value has increased since the owner of the means of production keeps the benefit from their sale. This benefit is not shared with the employee, so the initial value of the product has risen without the worker being compensated for their efforts. This results in a widening gap between the worker and the object of their work. Marx analyzed merchandise in terms of both use value and exchange value. He argues that the scale that determines the exchange value, or by which goods are exchanged, is the amount of labor socially necessary for their production. From an analysis of the different forms of exchange value, Marx explained money as a commodity and a special form of exchange value.