Sunday, May 04, 2008

Surplus Value made easy

Surplus Value is a term in radical political economy that derives from Marx, but it's always put into really, really, obscure terms. It's connected with the idea of wage labor. Instead of going through the usual bit I'm going to try to explain it by comparing artisan workshops with wage labor. In an artisanal economy, where businesses are made up of small workshops made up of crafts people, the workers are considered co owners, and entitled to a share of the profit, whether or not everyone received the same share. In wage labor, you have owners and employees, and the employees aren't entitled to shares of the profit but only to their wage, which in turn is gotten from renting their labor power out to the owners. The owners decide how to distribute the profits. By taking a product and selling it they realize value, the value of the goods sold, and this amount of cash is distributed among the owners. They also use the money to buy resources that are necessary for making more stuff. One of those resources is labor.

Labor is just another input. If the company makes spectacular profits the owners can make more money but they're not under any obligation to pass some of it onto the workers. They've already paid their wages. The difference between the amount of money paid in wages and the total made once things like supplies are subtracted is the surplus value, called a surplus value because it's the the amount of money realized over and above the expenses. It's sort of nebulous, but the issue is who exactly controls the surplus value: the owners or the workers? The owners can take that increase in money and give themselves a raise. The workers don't control the distribution of surplus value within a company. Surplus value could in some way be seen as another way of talking about who exactly gets to control where the profits go.

Part of the reasoning behind destroying wage labor is that by dissolving the division between owners and workers by giving control to the workers socially just arrangements of compensation will be produced.

*on edit: the difference between being linked to people who control the profits and being a worker for the people who control the profits is so big that it's a huge part of what makes up the difference between bourgeois society and working class society.
The comparative ease of life for kids who grow up in a stable bourgeois household comes from them being the beneficiaries of the dominant class in society, while the sort of instability and struggle that kids from poorer backgrounds go through is based on not being part of the class that controls the social surplus of profit.

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