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Surplus value

By Levi Clancy for Student Reader on

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As we read the accounts [in the ferocious chapter of Capital on "The Working Day"] of English factory labor employed for twelve- and fourteen-hour days and paid a near starvation wage, the existence of surplus value seems as undeniable as the naked extraction of a surplus from slave labor. In fact, however, there is no proof that surplus value existed even under these conditions. If wages were low, so was productivity. Competition among employers was fierce, and profits in many sweated trades may have been very low or even nil. Marx's depiction of surplus value carries the conviction of his outraged sense of justice, but even he did not claim to have "proved" its presence by a resort to empirical evidence. Heilbroner, p 108

Marx's theory is ... of systemic tendencies that will generate surplus value even in situations where there is a formal "equality" of bargaining power, where worker and capitalist meet one another as free agents to enter into wage agreements, and where workers are paid the full value of their labor power. For it is his contention that even in such a setting -- "the very Eden of the innate rights of man," [Capital I p 180] as he called it -- the value of labor power will always be less than than the value a capitalist will receive from the commodities that this labor power will produce. Heilbroner, p 108

If there is surplus value available from hiring labor, one would think that employers would hire more labor to enlarge the base from which they can draw profits. Thus the demand for labor would increase, and wages would rise. Moreover, wages would continue to increase as capitalists continued to compete for access to labor power, until there was no more surplus value to be had -- that is, until wages were so high that they let no quantum of unpaid labor within the capitalist's commodities. Heilbroner, p 108 - 109

To forestall this outcome, the bargaining situation itself, for all its seeming freedom and equality, must be tilted in favor of the capitalist. Marx identifies two such biases, both of which had actually been anticipated by Smith. The first was the weak bargaining power of labor -- the consequence of its inability to subsist very long as if it held back its labor. "The workman may be as necessary to his master as his master is to him," wrote Adam Smith, "but the need is not so immediate." [Wealth of Nations, p 66] Marx relies on this inherent inequality in his assumption that workers have nothing to sell but their labor power, and that capitalists have the book of society's wealth at their command. Thus workers cannot mount a strike effective enough to secure the payment of wages equal to the value of their output. Heilbroner, p 109


Heilbroner, Robert. Marxism: for and against.1980. Toronto: George J McLeod Limited.