The Commodity and Value

• Marx begins Das Kapital saying, “The wealth of those societies in which the capitalist mode of production prevails, presents itself as an ‘immense accumulation of commodities,’ its unit being a single commodity. Our investigation must therefore begin with the analysis of a commodity”.
• To Marx, the basic cell of the capitalist economy was the commodity.

A commodity is something that is produced for exchange,

• Every commodity has two values use value (what it’s used for) and exchange value (how much money you can make off of it)
• For example, let’s say you make a bong for your friend for free as a gift, that bong is not a commodity.
• But let’s say that you make a bong to sell at your weed shop, that bong is then a commodity because you’re making it for exchange.
• However, the bong also has a use value, which is smoking weed.

• The value of a commodity comes from socially necessary labor time, which has been called labor theory of value (LTV).
• Labor theory of value acknowledges that everything humans have ever used to create wealth requires human labor.
• LTV is an old idea, used by classical capitalist economists like Adam Smith and David Ricardo.
• LTV asserts that the average amount of time across an industry that it takes to make something determines its value, and what is made has to be actually needed or wanted by society.
• Marx called the average amount of time across an industry socially necessary labor.
  • If across an entire industry it takes skilled carpenters four hours to make a table and you make a shitty table in fifteen minutes, it’s going to be worth a lot less than the tables that took four hours. The value is determined by the average time across the industry.
  • Some people say, “Oh, well what if I spent 200 hours making mud?” Well, in labor theory of value it’s worthless. Because it’s not something that’s desired. LTV only works for a commodity that is desired, fills a human need, ect.
  • Marx insisted that the measure of value was not simply the time it took an individual to make it, but the time it would take an individual working with the average level of technology and skill, which he called the socially necessary labor time.
• Value is a measurement that is a social relation among people, which assumes a material form and is related to the process of production.
• An increase in productivity means less socially necessary labor time to make a good, which lowers value.
  • Capitalism is incentivized to do this because of competition, and because it lowers the value of socially necessary labor time across an entire industry and therefore the amount they have to pay workers.
  • Therefore, if usually across an entire industry it took a worker one minute to make a hamburger, but a new machine came out that reduced it to needing only thirty seconds to make a hamburger, the value of the burger would fall. The value of the socially necessary labor time would too, allowing the capitalist to pay the worker less and make more money, cash,ect.
• Labor is not the only source of use value; for example, nature also provides use values through air, water, etc..
• But Labor is special because it is the only thing that can add value to something. It can take raw materials like wood and turn it into tables adding value to it, or wires and metals into a PS5.
• Value is not the same as price. Value is a base cost of a good.
  • This is why communists don’t deny supply and demand. A commodity can fluctuate in price according to the market, but the average price it tends to fluctuate around is its true value, which is what LTV measures.
  • Value therefore is something underlying price, that the market is always trying to get towards
  • Think of buying a house in California: people here bid according to the market as it goes up and down it could be $700,000 during a crash or go up to $1.2 million, but when they go to the bank for a loan it only covers the underlying value $800,000. Which is what market is always generalizing towards.
• Value is ultimately a measure of hidden social relations found in every commodity.
  • When you go to Walmart and look at a toy, you don’t see the men that worked to pull the oil out of the earth or the sweat shop factory workers that assembled it, all you see is a toy.
• Value is “an expression of social production relations among people”.
• This abstraction of what these commodities all around us represent—human labor and us all relying on one another as humans on this earth—is what Marx dubbed the commodity fetish.

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Money, Capital, and Circulation

• Marx answers what money is very easily: money is a commodity that is a universal measure of value for all commodities.
  • As he said, money is “The commodity that functions as a measure of value, and, either in its own person or by a representative, as the medium of circulation”.
• Money is two things:
  • It acts as an ideal measure of value (representing the socially necessary labor time embedded in a commodity).
  • It acts as a store of value.
• Marx traced this back to barter. Before money, humans had to exchange things of equal values.
  • For example, before money, you had to give 200 bongs for 10 PS5s, and when that exchange was made, they had to represent the equal amount of social necessary labor, and it was a hassle.
• In Marx’s time this was gold, which became a universal equivalent and way to transfer value. These days, it’s just the dollar, which is backed by trust in government.
• Money being a commodity means it rises and falls in value correlated with the amount of value produced in a society.
• Marx saw the birth of exchange value in trade between ancient communities, which would create things for use, but then trade with foreign peoples.
  • When they did that, it was the birth of the commodity and the separation of exchange value from use value.
• Marx traced how commodities and money were circulated in an economy and very quickly realized that there were two formulas.
• C → M → C is the formula for how money circulated.
  • C → M → C stood for commodity → money → commodity.
• However, what Marx pointed out was that Money can be exchanged very quickly, commodities cannot.
  • Commodities are in fact very hard to exchange, especially if there’s more commodities than people want, leading them to sit around.
  • This basically disproved the idea that free-market liberals have that in a perfect free-market economy the exact amount of commodities that are needed get produced.
  • In addition, it’s also one of the fundamental bases of economic crashes. Often times more is produced in this circuit than is needed, and so warehouses just sit empty full of commodities that no one buys, especially during market bubbles that then violently burst.
• M → C → M’ (M prime) is the formula for capital. (Money→ Commodity → More money)
  • Capital is basically money that makes more money. Capital therefore can’t be money just sitting in the bank it has to be in constant circulation
• A capitalist has money, he hires labor (remember in capitalism labor is a commodity too) to create a commodity. Labor takes raw materials and makes something of more value (raw parts into a PS5) and he sells it for more money.
• It is a never-ending circuit and never-ending beast. The capitalist reinvests his money back into exploiting as more and more and more labor as possible (remember labor is one of the major sources of value).
• As Marx said, “Capital is dead labour, that, vampire-like, only lives by sucking living labour, and lives the more, the more labour it sucks. The time during which the labourer works, is the time during which the capitalist consumes the labour-power he has purchased of him”.
• In the competitive market this leads to infinite growth in a finite world. It also leads to imperialism as advanced countries seek new markets full of untapped labor to export their capital to.
• Capital is not just money, it’s a tool of leverage, control, and exploitation of the proletariat.
• “Capital is not a thing, but a social relation between persons”.
• Its goal is mere exchange value, which is all capitalists are interested in.
• As Marx says, the expansion of value is the mainspring of the circulation M → C → M’, and it becomes the capitalist’s subjective aim. It is only in so far as the appropriation of ever more and more wealth in the abstract becomes the sole motive of his operations, that he functions as a capitalist. Use-values must therefore never be looked upon as the real aim of the capitalist. The restless never-ending process of profit-making alone is what he aims at.
• This leads to a great contradiction. An exchange value is how much profit can be made from a commodity.
• The working class ultimately only cares about the use value of commodities.
• The bourgeoisie only cares about the exchange value. This is why we have sixteen million empty homes despite only 600,000 homeless people—homes as commodities in capitalism are used for exchange, not use.
• In the formula for capital M → C → M’, Marx talks about a soul being transferred from one object to another: “Money is changed into commodities, and by sale of those commodities is reconverted into more money”.
• The soul he is referring to is human labor and relations hidden in this formula.
• Capitalists often argue that their profit doesn’t come from workers but instead circulation. However, Marx expertly argued that circulation doesn’t add any value; within circulation all you can do is circulate the same value.
• The only time within the capitalist relation of production that value gets added is when workers create something.

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Labor Power, Wages, and Surplus Value

• Within capitalism, Workers sell their labor power to the capitalist in exchange for wages.
• In that sense, labor itself is a commodity with a use value (creating a good or doing a service) and an exchange value on the marketplace.
• Now within the capitalist equation of labor there is a thing called surplus value.
• Everyone on earth fundamentally understands surplus value without having exactly the words to describe it.
  • Think of the phrase, ‘Boss makes a dollar, I make a dime, that’s why I poop on company time’.
• When a worker clocks into work at, let’s say, a bong factory and with his labor power makes $3,000 dollars worth of bongs, however when he goes to collect his paycheck it’s only $300.
  • Where did that $2,700 dollars go? To the capitalist, the boss, the head honcho, etc..
• Labor power being a commodity inherently leads capitalists towards seeing workers as nothing more than commodities themselves, beasts of burden that need just the meagerest amount of subsistence to survive.
• Enter the subsistence wage.
• Marx described the subsistence wage as “The lowest and the only necessary wage rate is that providing for the subsistence of the worker for the duration of his work and as much more as is necessary for him to support a family and for the race of labourers not to die out”.
  • The ordinary wage, according to Smith, is the lowest compatible with common humanity, that is, with cattle-like existence.
• Basically, under capitalism, capitalists are incentivized not to see workers as anything but machines of labor, and are incentivized to only give workers the bare minimum amount of wages for them to be able to recover after a long day of work to be able to work again.
• Because of this, everyone’s workday is split into two parts: the first few hours where you work for your own wages and the last few hours where you work for your bosses or CEO’s moola, money, capital, cash, profits, whatever.
• As Marx said, “Capital, therefore, is not only… the command over labour. It is essentially the command over unpaid labour. All surplus-value… is in substance the materialization of unpaid labour. The secret of the self-expansion of capital resolves itself into having the disposal of a definite quantity of other people’s unpaid labour”.
• A part of your workday is spent generating revenue for your wages the rest not for yourself, but the asshole upstairs!
• In this graph the 3 hours is how much of the value you make is seen in your paycheck the surplus 5 hours how much your boss takes from you (and every work day is like this)
• The amount of hours in your workday you spend making your own paycheck is called necessary labor the amount of time in your workday you spend making your boss’s is called surplus labor.
• Because of this, capitalists are actually incentivized to extend the work day as much as they can because the more hours they can get people to work the more surplus value they produce that doesn’t go into a workers paycheck (your necessary labor).
• The struggle over the working day is between the capitalist, seeking to vastly extend it so that workers spend more time doing surplus labor, and the worker, who is incentivized to fight for a shorter working day.
  • During Marx’s time people used to work twelve hours, sometimes more; it was only the struggle of the working class that got us the eight-hour workday. Even recently, people like Google’s CEO, Elon Musk, etc. have all supported extending it because they can get more surplus value.
• How do capitalists even find workers willing to sell their labor power to them?
  • Over decades and centuries, the peasant and working classes had to be stripped of all personal property and all means of production had to have been concentrated into the capitalists’ hands.
  • Only by doing that were they able to find people desperate enough to sell their labor power.
• This is all the beginning of a basic crux of class conflict under capitalism: a capitalist’s desire is to keep wages as low as possible, a worker’s to get them as high as possible.
• The Mass of Surplus value is the total amount of surplus value a capitalist gets from all of his workers.
  • It’s basically the formula for how much money a company makes. Marx made the formula for it the average labor power x number of workers.
  • While this formula seems simple, it actually reveals a couple things about capitalism:
    • 1) Profits and how many workers capitalists have hired are tied.
    • If a capitalist fires a bunch of workers he has to make up for it by exploiting the remaining workers more (example: making them work more hours).
    • 2) Capitalists must always have a certain number of workers for profits, because if they kept firing workers and max exploiting the remaining ones, they would run into biological limits like people need sleep and can only work max twenty-four hours.
    • 3) The more workers capitalists hire the more surplus value they get.
  • However, capitalists often find themselves trying to reduce the number of workers that they have to save money on variable capital (money paid to workers) and exploiting their remaining workers more.
• Piece wages are a particularly dangerous thing because the more pieces begin to get produced across a shorter amount of time across an industry, the lower wages get (more pieces affect workers’ bottom lines).
• Piece wages are getting paid per unit of work (doordash,uber,ect)
  • As Marx said, piece-wage is lowered in the same proportion as the number of the pieces produced in the same time rises, and, therefore, as the working time spent on the same piece falls.
  • Basically the more workers in an piece wage industry create, the lower their wages per unit become
  • This change in piece-wage, so far purely nominal, leads to constant battles between capitalist and labor.
  • Either because the capitalist uses it as a pretext for actually lowering the price of labor, or because increased productive power of labor is accompanied by an increased intensity of the same.
  • Basically piece wages lead to constant struggles because your boss can decide that a unit you produced is not good enough and withhold your pay, or through the piece wage system make you work at an increased intensity than you normally would
  • Or because the laborer takes seriously the appearance of piece wages (viz., that his product is paid for, and not his labor-power) and therefore revolts against a lowering of wages, unaccompanied by a lowering in the selling price of the commodity.
• Marx made a very poignant point that capitalists buy all commodities below their value in order to make a profit and that includes labor power.
  • Labor power is bought below its value (wages), and the rest of the value is taken as surplus.
• Marx points out that wages are very good at hiding the true value someone produces in a day. Everyone under capitalism produces more value than they see in their paycheck, with the rest of their value going to their boss.
• Finally, labor power has a very important use value in that it can take raw materials and impart its value onto them.
  • As Marx says, the fact that this same labor is the universal value-creating element, and thus possesses a property by which it differs from all other commodities, is beyond the cognizance of the ordinary mind.
• Wages are also in a tug of war with the amount of those within the reserve army and those not.
• The intensity of labor, if increased, can create more value, which creates for the capitalist more surplus value.
  • This can be done artificially through squeezing workers of every last ounce of productivity. Think of like Amazon employees who sit in warehouses so long that they have to pee in bottles because of the intensity of moving boxes.
• The more productive labor is made, the more the work day can be shortened (but it won’t because of the amount of balance between necessary labor and surplus labor).
• “In capitalist society spare time is acquired for one class by converting the whole life-time of the masses into labour time”.
• Just like a house on the market, Marx asserted that labor power’s real price (wages we are paid) cannot be determined by supply and demand because it is always trending towards a hidden true value.
• The goal of a rise in wages: Variable capital (or the amount you get paid) grows with constant capital (or the amount of productive forces within the society).
  • This is because the more machinery and automation and productiveness you have, the more capital in general you have available, even if more gets spent on machinery, constant capital.
  • However, the issue is it is not a direct relation: the more constant capital grows, or the more industry grows, or the more machinery grows, the more it takes for a rise in wages.
  • Therefore, while wages can rise relatively quickly in a society that is rapidly industrializing, in a society that is already industrialized and getting more and more automatic, it takes much longer for wages to rise.
• Keynesianism offset this by temporarily tying wages to productivity, which stabilized capitalism for a little bit.
• Accumulation, the relationship between constant capital and variable capital, all ultimately signify that big rises in wages impair surplus value and therefore are always temporary and never that big.
• The inverse is also true: a fall in productivity will mean higher cost of labor power.

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Capital, Labor, and Production

• Now there are two types of labor: living labor and dead labor.
  • Living labor is the human worker.
  • Dead labor is the value of a past human worker transformed into the means of production (machines, tractors, offices, ect)
• Under capitalism, because it’s a competitive system, the value produced by living labor is used by capitalists to buy machines and more workers to then get more value, to then buy more machines and hire more workers.
• Because capitalism is a competition, “Production does not take place to satisfy human need… but in order to enable one capitalist to survive in competition with another capitalist”. The workers employed by each capitalist find their lives dominated by the drive of their employers to accumulate faster than their rivals.!
• There are two types of capital within the production process:
  • Constant Capital: Invested only in the means of production (e.g., machinery, raw materials). This cannot create new value.
  • The machines can impart their preexisting value onto the products, but they cannot create new value.
  • Variable Capital: Money spent buying (labor power). This is the only thing that can create new value.
• The rising organic composition of capital is a phenomenon where more and more money gets diverted to constant capital (machines) than variable capital (human laborers).
  • Even though humans are the major source of value, machines produce commodities so fast that capitalists can make up for the loss in value, which is offset by selling more products.
• As technological advancement leads to a greater reliance on machinery over workers, this causes a falling rate of profit because constant capital gains out over variable capital, which is the sole source of new value.
  • Put another way, as capitalism becomes more and more automated, the amount of profit that capitalists are able to generate lowers because labor power itself becomes less involved within the process.
• Why might capitalists want to do this then? Because radical new technologies temporarily give them an edge over their competition, and whatever rates of profit they lose by not having labor involved they’re able to offset it by selling more of their product than they usually would.
• However, because capitalism is a competition, as these technologies get implemented industry-wide, they lead to said falling rate of profit.
• The Falling Rate of Profit explains a lot of movements through history, imperialism, wars, erratic government acts, mass privatizations, ect. No theory has quiet explained modern day capitalism quiet as well
• The Falling Rate of Profit also explains why social democrats and reformers like Bernie and AOC who seek to return to a golden age of Keynesian economics are never going to win, America quiet simply has reached a point of constant capital investment where it can no longer offer welfare states and concessions.
• Marx recognized that capitalism is not the only system in history that extracted surplus value from the lower classes. However, what was unique about capitalism was that it was done through exchange value, which leads to some of the most overworking possible because of the endless seeking of profits.
  • Whereas Marx points out some Peasants who did have their surplus labor taken only worked fifty-six days a year.
  • This makes me think how unnatural our capitalist grind and shine work culture is, and no wonder why we experience burn out.
• Marx was horrified by child labor, which was common at the time.
  • He went on and on about how much Victorian capitalism, especially before the workers’ struggle got regulations, worked kids up to twelve hours close to death. They worked in dangerous chemical filled factories that killed their own workers in the most painful ways.
  • This is a sin capitalism has never shed; it exists all over the world today.
• To capitalism, all that matters is the exploitation of as much surplus value during the day. There is no humanity in capitalism.
• The capitalist is incentivized to see the worker as nothing but a machine of surplus value and doesn’t mind working men to death or lowering their life span.
• Capital is dead labor capitalists use to hire living labor. It’s the value from past people’s labor used to buy new people’s labor, in essence borrowed value, almost like a society-wide ponzi scheme.
• In addition, this leads to workers existing to satisfy capital growth, not all the wealth of these societies existing for our benefit.
• Capitalism is tending towards automation.

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The Division of Labor and Technology

• All labor throughout human history has been a social phenomenon. Humans have never done any kind of work alone before.
• The division of labor is one of the oldest markings of human society, beginning as Marx and Engels noted
• You gather berries, I hunt, etc..
• However, capitalism’s cooperative nature and division of labor is a unique phenomenon never before seen in human history.
• Before capitalism under feudalism, you had craftsmen, trades people who could make a whole product and were masters at making the whole product.
  • For example, a shoe craftsman who made the shoes from beginning to end by himself, developing the skills over decades to become an expert.
• However, under capitalism, masses of workers were put into big industrial warehouses.
  • Rather than each worker making the entire shoe from start to finish, they were divided into parts of the process of making the shoe along the assembly line (one guy makes the shoe laces, one guy makes the sole).
• These workers have absolutely no knowledge about the rest of the product, nor do they own it.
• This fragmentation of labor turned human beings into “appendages of machines”.
• This division of labor is entirely unique to the capitalist mode of production.
• It’s important because Marx was a historical materialist who traced how humans got to the modern situation. He also traced where humanity is going.
• Marx saw that with the growth of productive forces, automation, and the eventual classless society, we would have the break down of the division of labor itself. Labor would become something we do out of passion, not out of coercion.
  • Luxury space gay communism Star Trek something, idk, it’s hard to imagine for us in capitalism, just like it would have been hard for our ancestors to have imagined liberal democracy or blow job machines.
• One of the cruelest developments within capitalism and the industrial revolution that Marx observed was humanity’s relationship with machines.
  • Whereas before capitalism and the industrial revolution humans used tools to serve them (a farmer used a shovel to help him dig a hole), the industrial machines and behemoths and the relationship of capitalism stripped workers of their skills.
  • It turned them into small parts of the manufacturing process, and in turn made them servants of machines rather than machines serving them.
• This is Marx being a Hegelian, btw. Its things transforming into their opposites
• “The machine, which is the starting-point of the industrial revolution, supersedes the workman, who handles a single tool, by a mechanism operating with a number of similar tools, and set in motion by a single motive power, whatever the form of that power may be”.
• New technological innovation within machinery are often advertised as lessening the work day. Marx even pulls up an example from ancient Greece with slave owners saying this doo dad will lessen the work day for slaves.
• However, technological innovation under capitalism has always been about not lessening the workday, but instead extracting more surplus value out of workers.
• “Like every other instrument for increasing the productivity of labour, machinery [in capitalism] is intended to cheapen commodities and, by shortening the part of the working day in which the worker works for himself, to lengthen the other part, the part he gives to the capitalist for nothing. The machine is a means for producing surplus-value”.
• We can see this right now with how AI is advertised as being able to free workers and make us free to do whatever we want. At the same time, it’s being used as a stick to stop workers from fighting back unless they want to be replaced.
• And of course, the fact that productivity has not kept up with wages.
• At the heart of the relationship between workers and machines are two things: the reserve army of labor and the falling rate of profit.

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The Reserve Army of Labor and Falling Rate of Profit

• Investing more capital into machines than workers leads to a growing body of the reserve army of labor, which is just unemployed people.
• Capitalism prefers having a constant supply of unemployed people 24/7 because it makes negotiating wages a lot easier.
  • Your boss can completely fuck you over as long as there’s a hungry guy outside the office that’s so desperate that he’s willing to accept work for half the pay you are.
• The second fundamental idea is the falling rate of profit.
  • Remember what is the main source of value? Labor power, human labor power, right?
• Well, machines cannot create more value, they can only impart what value they have onto a commodity.
  • So, let’s say there’s a burger making machine, it will only last twenty years, and every burger it makes takes five seconds off of its life span. The owner bought the machine for $20,000. Well, every burger that machine made that took five seconds off its life span would impart three cents of value into the burger (These numbers are made up and not accurate, I’m not a mathematician).
• What generally happens under capitalism is a new machine is introduced and a company adopts it.
  • The company that adopts it is able to produce commodities a lot faster. Even though they have less value because labor power and socially necessary labor time is less involved, they can sell these super cheap commodities on the market which offsets the lower price.
  • However, capitalism is a competition, so across the entire industry the new machine slowly gets adopted.
  • When it gets adopted, since machines cannot create new value, and since it is now the base price across the market, the rate of profit falls.
• This is a ticking time bomb within capitalism. The more we automate and innovate, the less profits can be made within capitalism (that Marx much better discusses in Volume 3 of Capital).
• Why do capitalists do this though, if its leading to a falling rate of profit overall?
  • Well, in the short term it is immensely profitable.
• Here you need to understand the ideas of absolute surplus value and relative surplus value.
• Absolute surplus value is the surplus value made by increasing your work day.
  • At first, this is all capitalism does in its earliest stages: it just hires as many people as it can, makes them work long hours, and scrapes off the value that people spend not making their own wages.
• Relative surplus value is the surplus value that can be made by making your workers more productive with new machines.
  • When capitalism finally exhausts lengthening the workday as much as possible, it’s forced to adopt relative surplus value, which soon begins as Marx said to “conquer[ed] all the important branches”.
• By making workers able to produce commodities faster, even though their value lowers, the company is able to sell more on the market, which offsets this. But this then begins the cycle for the falling rate of profit.
• The contradiction between constant capital and variable capital also leads to an opposite reaction within capitalism.
  • And that is hiring workers at much lower wages rather than implementing in machines that could increase productivity and increase people’s quality of life and lessen their work hours.
  • So, capitalism is actually incentivized to not innovate, keep the productive new machines out of the work place as long as possible, only until it becomes more profitable to buy the machine over workers wages.
• R. Palm Dutte in Social Fascism or Revolution illustrates how capitalism actually holds back productivity perfectly in talking about fascist Germany’s glass blowing factories.
  • Basically, in the 1930s there was all this amazing innovation within the glass blowing industry that drastically cut down the time to create glass. But instead of actually implementing them, German manufacturers purposely held onto older technology and just continued to employ people at lower wages.
  • The Soviet Union however immediately bought the newest machines that increased productivity in all the fields from the USA, German manufacturers,
    etc..
• Marx was also very skeptical of the idea that just because the introduction of new machines laid off workers, the market would adjust itself to give them new jobs.
  • While this may be true to some extent in the long term, it’s never a clean re-organizing of the market. Hundreds of thousands of workers get essentially thrown away temporarily while the market re-structures itself (AI will replace human labor).

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Capitalism, Reproduction, and Globalization

• Marx noted that workers under capitalism become slaves to machines, not the other way around.
• Marx even touches on how the commodification of agriculture with machines of burden both kick out peasants and turn them into workers. It also leads to soil exhaustion of nutrients, which is an ongoing problem that we are still facing and a very early environmental critique of capitalism.
  • It’s not that complicated though: agriculture and soil are used for exchange value, and this leads to overconsumption of soil at unsustainable rates. That’s also just capitalism in general.
  • Oceans full of trash, eco sphere polluted, the coming eco collapse, and the machine of capitalism keeps trucking even though we are at a point where all this shit is not needed and we have enough to feed everyone on earth, but gotta keep producing commodities ig.
• Marx also divided labor into different kinds.
• One kind was productive labor (it’s a name with no emotional or moral attribute), is just labor that produces surplus value for a capital circuit.
  • Now to Marx, Productive labor was a broad definition. He even used the example of a teacher hired by a private school as a productive laborer, so anybody telling you baristas aren’t proletariat are wrong.
• Unproductive labor is labor that does not produce surplus value for a capital circuit, so a public school teacher, government official, a small shopkeeper who’s the owner and only employee, a doctor at a public hospital all are unproductive labor
• This labor is unproductive in the eyes of capital only really because it takes away value that could be put into the capital circuit which is why capitalism is always trying to privatize everything
• There’s one small sentence that caught my eye and explains globalization and sweat shops: “Just as the individual labourer can do more surplus-labour in proportion as his necessary labour-time is less, so with regard to the working population. The smaller the part of it which is required for the production of the necessary means of subsistence, so much the greater is the part that can be set to do other work”.
  • Basically, what Marx is saying is that in underdeveloped economies, people need less necessary labor (wages) because their economies are much cruder and people live simpler lives.
  • A peasant worker who lives in a shanty town in Egypt or India or Mexico therefore needs way less for his basic needs (necessary labor, lower wages) and can produce for the ruling classes more absolute surplus value (profit).
  • And of course, these people absolutely deserve much more, but capitalism is not a thinking machine and it reproduces these conditions then takes advantage of them.
  • This is because capital is hyper mobile. It can choose places where people have the lowest necessary labor costs (think globalization where all the factory jobs got moved out of the USA to China in the 90s, Sri Lanka, etc.).
• In addition, Marx points out there are vast differences across nations with their wages.
• Marx was writing before the rest of the world had industrialized, so he assumed that capitalism would prefer the more developed economies.
  • This is because more productivity for capitalists made the ratio between wages and surplus value profitable for them the most.
  • However, the industrialization of the world to an almost equal rate of productivity, while also nominal wages within the least developed economies has remained lower, has made globalization much more profitable than ever.
  • (Basically, now a factory in Cambodia is able to be as productive as a factory in Michigan, but Cambodian workers require less necessary labor time, more surplus for capitalists) .
• Ultimately, Marx, in order to find the value of labor, had to abstract labor power from labor (he hegaled it).
  • Labor is the actual work. Labor power is someone’s ability (potential) to do work, and this can be exchanged on the market. It also has a value through the amount of time it takes to train a person.
  • A neurosurgeon goes to medical school that has more socially necessary labor time, making it more valuable than a guy at the
    poop factory idk.
• Traditional economics is voodoo economics because it refuses to look deeper at the market than supply and demand.
• This is why so many of Marx’s predictions have come true: because he was focusing on value whose source is socially necessary labor time, not supply and demand.
• Marx pointed out another way you’re getting fucked under capitalism: you as the worker are the major source of value in most commodities.
  • Even though you make the product, it gets taken away from you. Some of the value that you produced is taken by the capitalist, and you have to rebuy the very products that you made on the market!
• Money and commodities therefore obscure this human relation of exploitation right in front of our eyes.
• To Marx, capitalism and its class society was a system that reproduced itself.
  • The worker created the capitalist through not only working for capitalists but also buying commodities they owned. The capitalist produced wage laborers.
• “The labourer therefore constantly produces material, objective wealth, but in the form of capital, of an alien power that dominates and exploits him ; and the capitalist as constantly produces labour-power, but in the form of a subjective source of wealth, separated from the objects in and by which it can alone be realised; in short he produces the labourer, but as a wage labourer”.
• “The Capitalist profits, not only by what he receives from, but by what he gives to the labourer. The capital given in exchange for labour-power is converted into necessaries, by the consumption of which the muscles, nerves, bones, and brains of existing labourers are reproduced, and new labourers are begotten”.
• What Marx is saying is that capitalists and workers reproduce more workers and capitalists through the never-ending cycle of C → M → C.
• Capitalism often tends to bring wages below the actual value of labor power so that the rest of the value produced can be used for accumulation of capital.
• Because wages don’t rise in proportion with productivity, an increase of productivity leads to a higher rate of surplus value. Even if wages do rise a little, they’re not at the same rates as productivity.
• As accumulation increases, capitalists don’t have to put all their money into the capital circuit and can start using parts of their money for personal things (yachts, gold toilets,ect).
• Capital and the price of labor power are elastic. Some liberal economists argue they are fixed (variable capital or wages paid, for example, will always be fixed and the same, is something they claim).

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Monopolization and The Reserve Army as a Tool

• Marx also expertly breaks down the libertarian argument of how the free market does not generalize towards monopolization.
• As he says, the free market, whenever it enters a new industry, is a competition of many capitals. Eventually, since it is a competition, one capital or a couple handful triumph over the others and amass all the other capitals.
• “The smaller capitals therefore crowd into spheres of production which modern industry has only sporadically or incompletely gotten hold of. Here competition rages in direct proportion to the number and in inverse proportion to the magnitudes of the antagonistic capitals. It always ends in the ruin of many small capitalists whose capitals partly pass into the hands of their conquerors and partly vanish”.
• Competition within the free market is not a tool against centralization but a tool of centralization.
• Marx defines accumulation as the building up of the capitalist relationship, and centralization the merger of those capitals into monopolies.
• The reserve army of labor is not only a source of unemployed people, but also, as far as capital is concerned, a surplus unnecessary population.
  • A population that weighs on the system.
• In this sense, once capitalism has reached its full extent, which in many ways it already has thanks to imperialism and globalization, it no longer offers a progressive force.
  • It becomes hyper-centralized or monopolized, and casts entire populations of the human race into the reserve army of labor or the surplus.
  • It begins then to weigh on the human race like an anchor, a tool of misery, war, and fascism.
• The reserve army is where Malthusianism came from. The idea that the human race could not support extra people. Malthus mystified it, leading to the exporting of foodstuffs in Bengal and Ireland during their famine.
• One part of the working class overworks and is squeezed of value, the other not at all. Imagine work under socialism.
• Marx mentions of capitalism’s relationship with population sizes:
  • “In fact, not only the number of births and deaths, but the absolute size of the families stand inverse proportion to the height of wages, and therefore to the amount of means of subsistence of which the different categories of labourers dispose. This law of capitalistic society would sound absurd to savages, or even civilised colonists. It calls to mind the boundless reproduction of animals individually weak and constantly hunted down”.
  • Basically, more people lower wages, more unemployed people who are deemed undesirable by capitalists in the meat grinder of the system.
• With regards to the reserve army of labor, Marx mentions that capital will intervene within the market through state interference in the market, putting aside its god supply and demand in order to course correct for the reserved armies of labor it creates.
  • This means that state interventions and regulation within the market, which libertarians often argue are Marxist, were anticipated by Marx to happen under capitalism to preserve capitalism.
• This is because capitalism naturally creates “Accumulation of wealth at one pole is, therefore, at the same time accumulation of misery, agony of toil slavery, ignorance, brutality, mental degradation, at the opposite pole ,
  i.e., on the side of the class that produces its own product in the form of capital”.
• As Marx said of the millions that go hungry in the richest nations, they don’t suffer from privation, they suffer from “Privation” of the capitalist all this!
  • i.e., “abstinence” from paying for the means of subsistence absolutely necessary for the mere vegetation of his “hands”.
• Marx noted that people’s wages at the time couldn’t keep up with their living costs.
  • Most people ended up living in shitty houses, unable to afford two-bedroom apartments, and the majority of people’s wages went to rent.
  • Does that sound familiar to anyone else?
• Does mass killing (or in the modern day deportation) permanently get rid of the reserve army of labor?
  • Nope, capitalism produces a reserve army of labor in proportion to its population. As Marx points out, one million dead Irish people still produced a reserve army of labor.
  • In addition, “the wages are just as low, that the oppression of the labourers has increased, that misery is forcing the country towards a new crisis”.

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Primitive Accumulation, Force, and Ideology

• We are often told by libertarian types that capitalism is
  consensual, that we signed a contract to work and that we can break it any time.
• However, no one agreed to be in that contract, and as Marx pointed out, capitalism required Primitive accumulation in order to create itself.
• Capitalism also tells itself tales of how capitalism was simply birthed by very smart people accumulating wealth and very stupid people didn’t, and they became capitalist and worker.
• As Marx says, capitalism’s birth actually required “conquest, enslavement, robbery, murder, briefly force, play the great part… As a matter of fact, the methods of primitive accumulation are anything but idyllic”.
• Primitive accumulation is the creation of two classes with commodities—capitalists who own the means of production and free workers who sell their labor power (which remember is a commodity too)
• In order to do this and create free workers, laborers have to have all property taken away from them so they’re desperate enough and mobile enough to become a free worker that sells their labor power on the market.
• “But, on the other hand, these new freedmen became sellers of themselves only after they had been robbed of all their own means of production”.
• “In the history of primitive accumulation, all revolutions are epoch-making that act as levers for the capital class in course of formation ; but, above all, those moments when great masses of men are suddenly and forcibly torn from their means of subsistence, and hurled as free and “unattached” proletarians on the labour-market”.
• What did primitive accumulation look like historically?
  • Marx sees its origins in both the enslavement of native Americans in the Americas, discovery of gold in the new world, the colonialism in the east Indies, the enslavement of Africans, the opium wars in China, etc..
  • “The treasures captured outside Europe by undisguised looting, enslavement, and murder, floated back to the mother-country and were there turned into capital”.
• In England, it looked like the authorities closing the commons which peasants used to farm on, and closing them for sheep pastures to make wool.
  • This forced peasants out of the countryside and made them landless free laborers, and put the lands in the hands of landlords and big company farms.
  • As one defender of the closing of the commons said, “If, by converting the little farmers into a body of men who must work for others, more labour is produced, it is an advantage which the nation”.
  • Sometimes whole peasant villages would be burned to expropriate the land.
  • “One old woman was burnt to death in the flames of the hut, which she refused to leave”.
• For the peasants thrown off the land, manufacturers didn’t have enough jobs for them. Vagabond laws would be created to punish the jobless (today this is done through anti-homeless laws).
• As Marx said of primitive accumulation and the slavery, genocides, colonialism, and peasant expropriations it required: “capital comes dripping from head to foot, from every pore, with blood and dirt”.
• Once capitalism is in place, it creates a system in which it seems like for workers that they voluntarily sell their labor power.
• Exploitation under capitalism is mystified under the free market. The working class is taught to assume the relation it finds itself in has always existed.
• However, as Marx showed, capitalism was deliberately created and is temporary.
• Marx summarizes all of Capital Volume 1 by saying:
  • “The advance of capitalist production develops a working class, which by education, tradition, habit, looks upon the conditions of that mode of production as self-evident laws of Nature. The organisation of the capitalist process of production, once fully developed, breaks down all resistance. The constant generation of a relative surplus-population keeps the law of supply and demand of labour, and therefore keeps wages, in a rut that corresponds with the wants of capital. The dull compulsion of economic relations completes the subjection of the labourer to the capitalist. Direct force, outside economic conditions, is of course still used, but only exceptionally. In the ordinary run of things, the labourer can be left to the “natural laws of production,” i.e., to his dependence on capital, a dependence springing from, and guaranteed in perpetuity by, the conditions of production themselves. It is otherwise during the historic genesis of capitalist production. The bourgeoisie, at its rise, wants and uses the power of the state to “regulate” wages, i.e., to force them within the limits suitable for surplus-value making, to lengthen the working-day and to keep the labourer himself in the normal degree of dependence. This is an essential element of the so-called primitive accumulation”.

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Banks and National Debt

• Capital as embodied labor past is transferred from nation to nation through credit and bank loans, and national debt.
• “A great deal of capital, which appears today in the United States without any certificate of birth, was yesterday, in England, the capitalised blood of children”.
• There’s this really great comic book called Wake by Rebecca Hall where she illustrates her time researching how all of England’s big insurance companies became enormously rich through the African slave trade.
• Even though I’m not a mathematician I wonder how much capital being used right now embodies that kind of long dead slave labor.
• Marx noted that within colonies such as America, since there were so many resources available for colonialists, the capitalist relation was harder to establish since wage laborers had a lot more resources and freedom.
  • This explains a lot of American culture (pictured here for it’s hell yeah attitude)

• As Marx said, “the essence of a free colony, on the contrary, consists in this—that the bulk of the soil is still public property, and every settler on it therefore can turn part of it into his private property and individual means of production … This is the secret both of the prosperity of the colonies and of their inveterate vice—opposition to the establishment of capital“.
• Marx used this to prove that capital was not just money in the bank but a tool of social relation, money in constant circulation C—>M—>C, since in colonial America workers had a lot more freedom of resources (gotten through settler colonialism) capital was harder to establish until the aftermath of the civil war and the consolidation of industry
• How many people do you know in your life that call themselves capitalists because they just have 100 dollars sitting in their bank account, it’s laughable
• National Debt is a fundamental part of primitive accumulation, Marx argued, since it issues bonds which capitalists can then buy and get assured capital from the government without doing anything (building factories, etc.). They get it just by watching their bonds grow.
• This parasitism is offset by taxing workers who then pay for this lazy class of rich people who just live off of government bonds. Heavy taxes make the working class more complacent.
• National debt then just becomes a way to funnel money from poor people through taxes to rich people through bonds.
• Banks also were granted the privilege of being able to print money, which ballooned them to unmeasurable power.

The Transformation into the Opposite

• Capital, commodity production, classes, and money have all existed long before capitalism to some degree or another. But capitalism has simplified them and brought them to an unprecedented level of development.
• In doing so, capitalism has allowed humanity for the first time to break away from class society and money forever if it can overthrow capitalism for good.
• Capital existed in a crude form within the feudal guilds (constant capital), merchants who traded on the world market, etc.. It came to grow well beyond into the burgeoning capitalist classes that then overthrew feudalism.
• Capitalism’s life cycle essentially is a series of transformations into opposites.
  • It transforms feudal society from a communal one into one of individualistic production.
  • This individualist production of early capitalism gets centralized by capitalist competition into monopolization.
  • It creates class conflict by hurling the majority of humanity into the proletariat and the few into the capitalist class.
  • It then allows for the final transformation into its opposite as capitalism becomes more centralized, global, and monopolized: socialism.
• Capitalism then is birthing the socialist mode of production through its very existence and lifecycle without realizing it.
• A better world is possible, Marx within Das Kapital proved that Capitalism was only a temporary phase of humanity with it’s own laws, many contradictions, and some progressive elements along with many regressive

Everything within the system of capital is a tug and pull, between reserve army of labor and the entire system, against necessary labor and surplus labor, between use value and exchange value, and eventually these contradictions will break and transform into their opposites into a whole new stage of humanity we call socialism.

Let the ruling classes tremble at a Communistic revolution. The proletarians have nothing to lose but their chains. They have a world to win.

-Marx The Communist Manifesto CH. 4

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Works Cited

“Marx on Dead and Living Labor (part 1).” YouTube video, 10:49. October 28, 2014.

https://www.youtube-nocookie.com/embed/a1_EyoQtb1o?rel=0&autoplay=0&showinfo=0&enablejsapi=0

“Marx’s Capital: Chapters 15: The Machine.” Communist.red. Accessed September 29, 2025. https://communist.red/marx-s-capital-chapters-15-the-machine/.

Cleaver, Harry. “Study Guide 3: The Circulation of Commodities, Chapter 3.” Reading Marx’s Capital with Open Eyes. University of Texas. Accessed September 29, 2025. https://la.utexas.edu/users/hcleaver/357k/357ksg03.html.

———. “Study Guide 11: Chapters 10 and 11, Section 1: Introduction to the Machine, Machinery and Large-Scale Industry.” Reading Marx’s Capital with Open Eyes. University of Texas. Accessed September 29, 2025. https://la.utexas.edu/users/hcleaver/357k/357ksg11.html.

Fine, Ben. Marx’s Capital. 4th ed. London: Pluto Press, 2016.

Harman, Chris. How Marxism Works. London: Bookmarks Publications, 1993. Marxists Internet Archive. https://www.marxists.org/ebooks/harman/Chris_Harman_-_How_Marxism_Works.pdf.

Harvey, David. “Living and Dead Labor.” YouTube video, 12:44. October 29, 2011.

https://www.youtube-nocookie.com/embed/ouuQ29wI3Kw?rel=0&autoplay=0&showinfo=0&enablejsapi=0

Kautsky, Karl. The Economic Doctrines of Karl Marx. London: Adam and Charles Black, 1903. Marxists Internet Archive. https://www.marxists.org/archive/kautsky/1903/economic/index.htm.

Marx, Karl. “Summary of Chapter III: Money, or the Circulation of Commodities.” From Capital: Volume I. 1868. Marxists Internet Archive. https://www.marxists.org/archive/marx/works/1867-c1/1868-syn/ch03.htm.

Marx, Karl, and Frederick Engels. “Position of the Communists in Relation to the Various Existing Opposition Parties.” Chapter 4 in Manifesto of the Communist Party. 1848. Marxists Internet Archive. https://www.marxists.org/archive/marx/works/1848/communist-manifesto/ch04.htm.

———. “Wages, Capital and the Restitution of Capital.” In Economic and Philosophic Manuscripts of 1844. Translated by Martin Milligan. Marxists Internet Archive. https://www.marxists.org/archive/marx/works/1844/manuscripts/wages.htm.

Rubin, Isaak Illich. Essays on Marx’s Theory of Value. Translated by Milos Samardzija and Fredy Perlman. Detroit: Black & Red, 1973. Marxists Internet Archive. https://www.marxists.org/archive/rubin/value/.

The Socialist Alternative. “Marx’s Capital Vol. 1, Ch. 12: A Quick Summary of Absolute and Relative Surplus Value.” YouTube video, 10:48. October 29, 2016.

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“Summary of Chapters 12, 13, 14.” PDF document. CSE Midlands. Last modified February 2013. https://csemidlands.wordpress.com/wp-content/uploads/2013/02/summary-of-chapters-12-13-14.pdf.

Dutt, R. Palme. Fascism and Social Revolution: A Study of the Economics and Politics of the Extreme Stages of Capitalism in Decay. New York: International Publishers, 1935. https://www.marxists.org/archive//dutt/1935/fascism-social-revolution-3.pdf.