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Surplus labour is a concept used by Karl Marx in his critique of political economy. It means labour performed in excess of the labour necessary to produce the means of livelihood of the worker ("necessary labour"). According to Marxian economics, surplus labour is usually "unpaid labour". Marxian economics regards surplus labour as the ultimate source of capitalist profits.
Origin of surplus labourMarx explains the origin of surplus labour in the following terms:
The historical emergence of surplus labour is, according to Marx, also closely associated with the growth of trade (the economic exchange of goods and services) and with the emergence of a society divided into social classes. As soon as a permanent surplus product can be produced, the moral-political question arises as to how it should be distributed, and for whose benefit surplus-labour should be performed. The strong defeat the weak, and it becomes possible for a social elite to gain control over the surplus-labour and surplus product of the working population; they can live off the labour of others. Labour which is sufficiently productive so that it can perform surplus labour is, in a cash economy, the material foundation for the appropriation of surplus-value from that labour. How exactly this appropriation will occur, is determined by the prevailing relations of production and the balance of power between social classes. According to Marx, capital had its origin in the commercial activity of buying in order to sell, with the aim of gaining an income (a surplus value) from this trade. But, initially, this does not involve any capitalist mode of production; rather, the merchant traders are intermediaries between non-capitalist producers. During a lengthy historical process, the old ways of extracting surplus labour are gradually replaced by commercial forms of exploitation. Surplus labour and exploitationExploitation occurs when those appropriating surplus labour — whether in the form of surplus-value, surplus product or direct surplus labour — are different than those performing surplus labour. Just as there are attempts to force more work out of the workers, there are also attempts at resistance to exploitation, e.g. strike action, union campaigns, living wage campaigns, go-slows, refusal to perform tasks not contracted for, threatening to leave employment for another job if that is a real possibility, etc. Critical variables in determining the total surplus labor performed are:
In Capital, Volume I, Marx portrays the battle over work-time as the fulcrum of class conflict in capitalism, which can involve complex trade-offs between time and money. However, contrary to many Marxists, Marx never believed that exploitation at the point of production was the only kind of exploitation that exists. Surplus labour in capitalist societyIn feudal society, it was often quite clear how many days a serf or peasant worked for himself or herself (necessary labour), and how many days s/he worked for his or her lord (surplus labour). On this important distinction between a corvée and a capitalist economy, Lenin writes:
Under capitalism, the distinction between necessary labour and surplus labour however becomes obscured by the nature of the market transactions involved. Most people are legally free agents who can buy and sell labour on the basis of more or less equal access to markets, and an equal opportunity to better their lot in competition with others. Yet, owners of substantial property assets enter the market with an advantage over propertyless people who simply have to sell their labour to survive. It gives property owners the power to command the surplus labour of others. When the wage contract is signed, it appears that the employee is paid for the hours that he works, but at the same time, Marx argues, the worker adds an amount of value on the job in excess of the value of his wage/salary: he performs surplus labour. In hiring an employee, the employer thus not only incurs a cost (the wage-bill, based on hours worked) but also reaps a benefit, namely the extra value the employee creates (the surplus product of labour) beyond the value of what it costs to hire him or her. This benefit, Marx argues, shows up in the form of gross profit income after deduction of costs, but the only real evidence that surplus labour is the cause of it, is that the value of output produced is higher than the value of inputs used to produce it. The economic relation of necessary and surplus labour has therefore become hidden, and the division of enterprise revenues between wages, profits and taxes seems to become a purely distributional issue; just how exactly that new value originated, could be theorised about in all sorts of ways (see factors of production and surplus value). Surplus labour and historical materialismIn Das Kapital Vol. 3, Marx highlights the central role played by surplus labour:
This statement is a foundation of Marx's historical materialism insofar as it specifies what the class conflicts in civil society are ultimately about: an economy of time, which compels some to do work of which part or all of the benefits go to someone else, while others can have leisure-time which in reality depends on the work efforts of those forced to work. In modern society, having work or leisure may often seem a choice, but for most of humanity, work is an absolute necessity, and consequently most people are concerned with the real benefits they get from that work. They may accept a certain rate of exploitation of their labour as an inescapable condition for their existence, if they depend on a wage or salary, but beyond that, they will increasingly resist it. Consequently, a morality or legal norm develops in civil society which imposes limits for surplus-labour, in one form or another. Forced labour, slavery, gross mistreatment of workers etc. are no longer generally acceptable, although they continue to occur; working conditions and pay levels can usually be contested in courts of law. Surplus labour and unequal exchangeMarx acknowledged that surplus labour may not just be appropriated directly in production by the owners of the enterprise, but also in trade. This phenomenon is nowadays called unequal exchange. Thus, he commented that:
In this case, more work effectively exchanges for less work, and a greater value exchanges for a lesser value, because some possess a stronger market position, and others a weaker one. For the most part, Marx assumed equal exchange in Das Kapital, i.e. that supply and demand would balance; his argument was that even if, ideally speaking, no unequal exchange occurred in trade, and market equality existed, exploitation could nevertheless occur within capitalist relations of production, since the value of the product produced by labour power exceeded the value of labour power itself. Marx never completed his analysis of the world market however. In the real world, Marxian economists like Samir Amin argue, unequal exchange occurs all the time, implying transfers of value from one place to another, through the trading process. Thus, the more trade becomes "globalised", the greater the intermediation between producers and consumers; consequently, the intermediaries appropriate a growing fraction of the final value of the products, while the direct producers obtain only a small fraction of that final value. The most important unequal exchange in the world economy nowadays concerns the exchange between agricultural goods and industrial goods, i.e. the terms of trade favour industrial goods against agricultural goods. Often, as Raul Prebisch already noted, this has meant that more and more agricultural output must be produced and sold, to buy a given amount of industrial goods. This issue has become the subject of heated controversy at recent WTO meetings. It is perhaps important to note that the practice of unequal or unfair exchange does not presuppose the capitalist mode of production, nor even the existence of money. It only presupposes that goods and services of unequal value are traded, something which has been possible throughout the whole history of human trading practices. Modern criticism of Marx's concept of surplus labourAccording to economist Fred Moseley, "neoclassical economic theory was developed, in part, to attack the very notion of surplus labor or surplus value and to argue that workers receive all of the value embodied in their creative efforts." [4] Some basic modern criticisms of Marx's theory can be found in the works by Pearson, Dalton, Boss, Hodgson and Harris (see references). The Analytical Marxist John Roemer challenges what he calls the "fundamental Marxian theorem" (after Michio Morishima) that the existence of surplus labour is the necessary and sufficient condition for profits. He proves that this theorem is logically false. However, Marx himself never argued that surplus labour was a sufficient condition for profits, only an ultimate necessary condition (Morishima aimed to prove that,starting from the existence of profit expressed in price terms, we can deduce the existence of surplus value as a logical consequence). Five reasons were that:
All that Marx really argued was that surplus labour was a necessary feature of the capitalist mode of production as a general social condition. If that surplus labour did not exist, other people could not appropriate that surplus labour or its products simply through their ownership of property. In wealthy countries with a complex division of labour, it may become debatable what labour is really "necessary" and what labour forms a "surplus"; a large number of people can live off the labour of others e.g. through government benefits or the generosity of others, or some kind of "deal" unrelated to productive activity. Also, the amount of unpaid, voluntary and housework labour performed outside the world of business and industry, as revealed by time use surveys, suggests to some feminists (e.g. Marilyn Waring and Maria Mies) that Marxists may have overrated the importance of industrial surplus labour performed by salaried employees, because the very ability to perform that surplus-labour, i.e. the continual reproduction of labour power depends on all kinds of supports involving unremunerated work (for a theoretical discussion, see the reader by Bonnie Fox). In other words, work performed in households — often by those who do not sell their labour power to capitalist enterprises at all — contributes to the sustenance of capitalist workers who may perform little household labour. Possibly the controversy about the concept is distorted by the enormous differences with regard to the world of work:
Countries differ greatly with respect to the way they organise and share out work, labour participation rates, and paid hours worked per year, as can be easily verified from ILO data (see also Rubery & Grimshaw's text). The general trend in the world division of labour is for hi-tech, financial and marketing services to be located in the richer countries, which hold most intellectual property rights and actual physical production to be located in low-wage countries. Effectively, Marxian economists argue, this means that the labour of workers in wealthy countries is valued higher than the labour of workers in poorer countries. However, they predict that in the long run of history, the operation of the law of value will tend to equalize the conditions of production and sales in different parts of the world. [5] Another criticism of Marx's concept of surplus labor is that it ignores the investment by capitalists to purchase capital improvements, such as buildings, machinery, etc.[citation needed] The worker, by himself, could not obtain all of the capital required for his position. Therefore, the capitalist enables the worker to produce more for himself, by giving him access to capital improvements. The capitalist is rewarded by a return on his capital investments, and is therefore encouraged to increase production, and therefore employment, again benefiting the worker. References
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