Previously, in Chapter 10, having explained that the source of profits lies in the unpaid labour of the working class, Marx demonstrated how the capitalists squeeze greater profits from workers by extending the hours of the working day. Now Marx turns his attention towards how the capitalists increase their profits whilst maintaining the same length of the working day.
The former method of increasing profits, arising from a lengthening of the working day, Marx refers to as the production of absolute surplus-value. The additional surplus-value obtained within a given length of the working day, in contrast, Marx terms relative surplus-value.
Relative surplus value and productivity
How, then, do the capitalists go about producing an increase in the relative surplus-value? For a given length of the working day, the total value produced is also a given, since value (exchange-value) is the result of socially necessary labour time. This labour time, as explained earlier in Capital, can be split into: the necessary labour, in which the worker creates the value needed to cover the cost of their labour power; and the surplus labour, in which the worker is effectively working for free for the capitalist, creating surplus-value.
The only way to increase the amount of surplus-value without altering the length of the working day, therefore, is to increase the ratio of surplus labour to necessary labour. This can also be expressed in an increase of the ratio s:v, or in other words, in an increase in the rate of exploitation, s/v. But to increase this ratio without changing the total value produced (determined by the length of the working day) implies only one thing: a reduction in v, the value of labour-power – the necessary labour time.
This reduction in the value of labour-power, in turn, means a reduction in the value of those commodities that form the means of subsistence for workers – i.e. a reduction in the socially necessary labour time needed to produce the commodities consumed by the working class. And as Marx notes:
“...this is impossible without an increase in the productivity of labour...by an alteration in his [the worker’s] tools or in his mode of working, or both. Hence the conditions of production of his labour, i.e. his mode of production, and the labour process itself, must be revolutionised...to endow a given quantity of labour with the power of producing a greater quantity of use-value.” (Karl Marx, Capital, Volume One, Penguin Classics edition, p431)
“The technical and social condition s of the process and consequently the mode of production itself must be revolutionised before the productivity of labour can be increased. Then, with the increase in the productivity of labour, the value of labour-power will fall, and the portion of the working day necessary for the reproduction of that value will be shortened.” (p432)
It is through increasing the productivity of labour, therefore, that the capitalists increase relative surplus-value and thus their profits; and this is done by developing the means of production and revolutionising the productive process with new technology and techniques.
Order out of chaos
One must separate, however, the general process and the overall result from the rationale of the individual agents. As Marx explains, “The general and necessary tendencies of capital must be distinguished from their forms of appearance.” (p433). Whilst a general increase in productivity will lead to a decrease in the value of labour-power and thus an increase in relative surplus-value, this general result is not the motive behind the actions of the individual capitalist.
The individual capitalist does not have the intention of cheapening the social value of labour-power. Rather, the capitalist increases productivity within their business in order to produce more for less; to cheapen the cost of the commodities they produce and thus produce at a cost below that of the social average. By doing so, the individual capitalist can outcompete their rivals, sell at a price below their competitors, capture market share, and make super-profits.
The laws of competition within capitalism, however, force all capitalists to act in a similar manner. Each particular attempt to increase productivity, arising from the motive of private profit, therefore contributes to a general process of increasing productivity within society.
“While it is not our intention here to consider the way in which the immanent laws of capitalist production manifest themselves in the external movement of the individual capitals, assert themselves as the coercive laws of competition, and therefore enter into the consciousness of the individual capitalist as the motives which drive him forward, this much is clear: a scientific analysis of competition is possible only if we can grasp the inner nature of capital, just as the apparent motions of the heavenly bodies are intelligible only to someone who is acquainted with their real motions, which are not perceptible to the senses.” (p433)
The capitalists, however, are constantly chasing their own tails, for the super-profits they individually obtain in the short-term from increasing productivity in their firm are lost as soon as this increase in productivity becomes generalised – as competition forces others to adopt the same methods.
“[T]his extra surplus-value vanishes as soon as the new method of production is generalised, for then the difference between the individual value of the cheapened commodity and its social value vanishes. The law of the determination of value by labour-time makes itself felt to the individual capitalist who applies the new method of production by compelling him to sell his goods under their social value; this same law, acting as a coercive law of competition, forces his competitors to adopt the new method.” (p436)
The laws of competition, therefore, operate dialectically, imposing themselves as a force on the capitalists, yet arising out of the individual actions and interactions of the capitalists themselves. The accidental wills of the capitalists assert themselves as a necessary tendency to increase productivity; an order emerges in the economy out of the chaotic and anarchic motion of the many individuals involved.
This process, in the heyday of capitalism, was responsible for an enormous development of the productive forces, increasing the wealth in society at a rate never previously seen in history. However, it is precisely the anarchic nature of this process that leads to the absurd contradictions we see under capitalism today: of mass unemployment alongside people working two or three jobs; of homelessness alongside empty homes.
Capitalism has developed science and technology to an extraordinary level; but it is not able to utilise this development in the interests of ordinary people. Rather than increasing the leisure time of the working class, the increases of productivity in society have simply led to greater profits for a tiny elite.
“The shortening of the working day, therefore, is by no means what is aimed at in capitalist production, when labour is economised by increasing its productivity. It is only the shortening of the labour-time necessary for the production of a definite quantity of commodities that is aimed at...The objective of the development of the productivity of labour within the context of capitalist production is the shortening of that part of the working day in which the worker must work for himself, and the lengthening, thereby, of the other part of the day, in which he is free to work for nothing for the capitalist.” (p438)
The capitalist, then, strives to revolutionise the process of production, introducing new, more efficient technologies and techniques. Marx explains how, historically, capitalism has achieved this increase in productivity. On the one hand, there is a constant investment in new machinery, tools, and technology – Marx elaborates on this in later chapters. On the other hand, there is change in the methods and techniques employed in the productive process, with increasing efficiency coming from new forms of organisation.
Historically, Marx explains, there has been a vast improvement in the general productivity of labour brought about by bringing many individuals under one roof, integrating many individual labours into a single process of production. At first we see workshops, then manufacturing and the rise of the factory. “Economies of scale” emerge – improvements in efficiency brought about by the communal use of resources and infrastructure – that serve to lower costs. “The effect is the same as if the means of production had cost less. This economy in the application of the means of production arises entirely out of their joint consumption in the labour process by many workers.” (p442
Importantly, we find that the joint action of many individuals in co-operation achieves more than a simple multiplication of their isolated and individual efforts. Dialectically, like the organs of a body that work together to give life to the human body, we find that co-operation in production means a result that is more than a formal sum of its parts.
“Just as the offensive power of a squadron of cavalry, or the defensive power of an infantry regiment, is essentially different from the sum of the offensive or defensive powers of the individual soldiers taken separately, so the sum total of the mechanical forces exerted by isolated workers differs from the social force that is developed when many hands co-operate in the same undivided operation...Not only do we have here an increase in the productive power of the individual, by means of co-operation, but the creation of a new productive power, which is intrinsically a collective one.” (p443)
For co-operation in the workplace to occur, however, there must be a collective plan of production within the workplace; a common process composed of individuals acting under a single directive. This, under capitalism, implies the common employment of many workers under a single capitalist; and this, in turn, implies a certain concentration of capital – the concentration of the ownership of the means of production in a single pair of hands, upon which many workers can be set to work.
“As a general rule, workers cannot co-operate without being brought together; their assembly in one place is a necessary condition for their co-operation. Hence wage-labourers cannot co-operate unless they are employed simultaneously by the same capital, the same capitalist, and therefore unless their labour-powers are brought simultaneously by him.” (p447)
“Hence, concentration of large masses of the means of production in the hands of individual capitalists is a material condition for the co-operation of wage-labourers, and the extent of co-operation, or the scale of production, depends on the extent of this concentration.” (p448)
The co-operation enabled by this concentration of capital, meanwhile, enables the capitalist to increase productivity, lower costs, become more competitive, gain market share, and thus increase the concentration of capital even further. Hence the tendency within capitalism for the free market of competition to turn into its opposite: monopoly.
Capitalism, therefore, relies on the co-operation of workers; on the bringing together of many workers into a social process of labour. This same process of co-operation that capitalism requires for the sake of profits, however, also helps to forge the weapon that is needed to overthrow the capitalist system: the organisation of the working class.
“As the number of the co-operating workers increases, so too does their resistance to the domination of capital, and, necessarily, the pressure put on by capital to overcome this resistance.” (p449)
By being brought together and freed from a life of isolated labour, the conditions of capitalist production create class consciousness and, in turn, class organisation. And, as with the dialectical manner in which the combined efforts of many workers achieves more than the accumulation of their individual efforts, it is through their unity and organisation that the working class becomes an unstoppable force, capable of transforming society.
Capitalism, therefore, by creating the conditions for the organisation of the working class, creates its own gravediggers. Hence the drive today by the capitalists to try and prevent workers from organising, from the abolition of the “closed shop” (whereby trade unions could prevent non-unionised labour from being employed) to the need for postal ballots – rather than workplace votes – in order to call a strike. Hence also the constant attempts by the capitalists to atomise and isolate workers through outsourcing, sub-contracting, privatisation, and freelancing.
Division of labour
The division of labour within society does not originate with capitalism, but is present in even the most primitive forms of society. As Engels notes in his work “The Origins of the Family, Private Property, and the State”, the first division of labour develops in society on the basis of the physiological differences between the sexes. As discussed previously, the division of labour within society is the prerequisite to the development of commodity production and exchange – the division of labour into separate producers, producing for exchange rather than for personal consumption.
Capitalism takes this division of labour and intensifies it further: on the one hand, capitalism increases the productivity of labour through ever-increasing specialisation, breaking up the productive process into smaller and smaller repetitive tasks; on the other hand, as capitalist production expands, different – previously isolated – trades and sectors are brought under a common plan of production. In a dialectical, seemingly contradictory manner, therefore, capitalism divides workers up, only to then place them alongside each other again.
“The mode in which manufacture arises, its growth out of handicrafts, is therefore twofold. On the one hand it arises from the combination of various independent trades, which lose that independence and become specialised to such an extent that they are reduced to merely supplementary and partial operations in the production of one particular commodity. On the other hand, it arises from the co-operation of craftsmen in one particular handicraft; it splits up that handicraft into its various detailed operations, isolating these operations and developing their mutual independence to the point where each becomes the exclusive function of a particular worker. On the one hand, therefore, manufacture either introduces division of labour into a process of production, or further develops that division; on the other hand it combines together handicrafts that were formerly separate. But whatever may have been its particular starting-point, its final form is always the same – a productive mechanism whose organs are human beings.” (p457)
Capitalism, then, turns the individual worker into just another cog in the machine. Commodity production becomes not the result of individual production, but of social, collective production. The worker is further alienated from his/her labour – no worker can point at a good and say “I produced that.” “[T]he specialised worker produces no commodities. It is only the common product of all the specialised workers that becomes a commodity.” (p475)
At the same time, co-operation creates a discipline amongst workers, forcing them to attain a certain rhythm and level of efficiency in order to fit in with the other agents involved in the common process of production. Individual will is subsumed by interdependent needs of the total productive organism. Therefore, whilst the law of value and socially necessary labour operates through the market forces of competition, it is through co-operation that the concept of necessary labour time asserts itself within the workplace.
“It is clear that the direct mutual interdependence of the different pieces of work, and therefore of the workers, compels each one of them to spend on his work no more than the necessary time. This creates a continuity, a uniformity, a regularity, an order, and even an intensity of labour, quite different from that found in an independent handicraft or even in simple co-operation. The rule that the labour-time expended on a commodity should not exceed the amount socially necessary to produce it is one that appears, in the production of commodities in general, to be enforced from outside by the action of competition: to put it superficially, each single producer is obliged to sell his commodity at its market price. In manufacture, on the contrary, the provision of a given quantity of the product in a given period of labour is a technical law of the process of production itself.” (p465)
The anarchic nature of capitalism, operating blindly under private ownership and the laws of competition, creates its own contradictions. On the one hand, the division of labour in society – i.e. the relative importance of different industries and activities – is regulated through the invisible hand of the market; through the exchange of commodities. On the other hand, the division of labour within the workplace is regulated and directed by a single capitalist. Within capitalism, therefore, we see the contradictory tendencies of competition within the market and yet organisation and planning within the firm; a contradiction between the needs of society and the needs of the individual capitalist.
“The division of labour within society is mediated through the purchase and sale of the products of different branches of industry, while the connection between the various partial operations in a workshop is mediated through the sale of the labour-power of several workers to one capitalist, who applies it as combined labour-power. The division of labour within manufacture presupposes a concentration of the means of production in the hands of one capitalist; the division of labour within society presupposes a dispersal of those means among many independent producers of commodities...
“...The planned and regulated a priori system on which the division of labour is implemented within the workshop becomes, in the division of labour within society, an a posteriori necessity imposed by nature, controlling the unregulated caprice of the producers, and perceptible in the fluctuations of the barometer of market prices.” (p476)
Frederick Engels, in his pamphlet Socialism: Utopian and Scientific, noted the same contradiction within capitalism between the immense level of planning that takes place with each firm and business – planning that is put in place for sake of increasing profits – and the incredible anarchy that exists between firms and businesses. This contradiction, Engels explained, is only a reflection of the contradiction between the incredible socialised nature of production under capitalism – in which all producers are part of a common world system of commodity production and exchange – and the private ownership over the means of production and private appropriation of the products of production.
“The contradiction between socialised production and capitalistic appropriation now presents itself asan antagonism between the organization of production in the individual workshop and the anarchy of production in society generally.” (Engels, Socialism: Utopian and Scientific, Chapter 3, emphasis in the original)
The irony, Marx notes, is that it is the very same ladies and gentlemen who preach about “freedom”, “liberty”, and “individuality” that are the ones who – within their businesses – demand the very opposite: organisation, authority, and co-operation. The defenders of the free market – the ones who so vehemently oppose any socialist plan of production within society as a whole – are at the same time the most ardent supporters of a plan of production within the firm. As ever, therefore, we see the utter hypocrisy of the bourgeois, whose “freedoms” and “rights” are only ever freedoms and rights for them; the bourgeois freedom to exploit the labour of others. Everyone else must accept their subjugation to the needs of capital.
“The same bourgeois consciousness which celebrates the division of labour in the workshop, the lifelong annexation of the worker to a partial operation, and his complete subjection to capital, as an organisation of labour that increases its productive power, denounces with equal vigour every conscious attempt to control and regular the process of production socially, as an inroad upon such sacred things as the rights of property, freedom and the self-determining ‘genius’ of the individual capitalist. It is very characteristic that the enthusiastic apologists of the factory system have nothing more damning to urge against a general organisation of labour in society than that it would turn the whole of society into a factory.” (p477)
It is this contradiction at the heart of the capitalist system – between socialised production and private appropriation – that ultimately turns the initial progressiveness of capitalism into its opposite; into a system that can no longer develop or utilise the productive forces in society. Competition and private ownership, having provided the motor force behind the development of the means of production in the heyday of capitalism, now present themselves as enormous barriers to the development of science, technology, and industry; as enormous fetters on the progress of society and humanity – fetters that periodically plunge society into a state of crisis and barbarism.
We have an incredible array of scientific knowledge and technology at our fingertips, and yet capitalism is unable to utilise this. Technologies such as 3D printing, machine learning, and other automation techniques open up a possibility of completely revolutionising production and, in turn, society as a whole. But under capitalism, this remains mere potential, with the application of new machinery and technology leading not to increased living standards, but simply to ever increasing unemployment at one end and profits at the other.
We leave the final word to Engels:
“[The] solution can only consist in the practical recognition of the social nature of the modern forces of production, and therefore in the harmonising with the socialised character of the means of production. And this can only come about by society openly and directly taking possession of the productive forces which have outgrown all control, except that of society as a whole. The social character of the means of production and of the products today reacts against the producers, periodically disrupts all production and exchange, acts only like a law of Nature working blindly, forcibly, destructively. But with the taking over by society of the productive forces, the social character of the means of production and of the products will be utilised by the producers with a perfect understanding of its nature, and instead of being a source of disturbance and periodical collapse, will become the most powerful lever of production itself.” (Engels, Socialism: Utopian and Scientific, Chapter 3, emphasis in the original)