1. According to the Labor Theory of Value, what is the source of surplus value in Capitalism? Explain in relation to the working day.

CONTEXT

Marx's Labor Theory of Value Marx adopts Ricardo's interpretation of the labor theory of value, with some important clarifications. First, Marx recognizes that human labor is not the only source of use-value. To produce useful products, human beings always require some previously acquired means of production (even if it is only a stick used to knock down nuts from the higher branches of a tree), and the natural resource base of the earth (the tree itself). The labor theory of value, for Marx, is a theory of the source of exchange-value, and thus a theory limited to production for exchange, that is, commodity production. It might be more accurate to say that labor becomes the source of value in conditions of commodity production. Marx's basic picture is that the expenditure of labor on commodities produces (or adds) value, which is embodied in the commodity and manifests itself as exchange-value in the form of money. Marx warns us, however, that not all labor creates value, but only necessary, simple, social, and abstract labor as opposed to wasted, complex, private, and concrete labor. Each of these qualifications points to an important aspect of his theory of the commodity. 106 / ADAM'S FALLACY To begin with abstract labor, the most difficult of these concepts, Marx notes that when we see labor expended it is always some particular type of labor engaged in some particular productive task: metalworking, computer programming, sewing, weaving, spinning, or whatever. Marx uses the term "concrete" for this aspect of labor. Concrete labor is linked to the particular use-value being produced (steel, computer programs, textiles). Thus in the concrete aspect all labor is differentiated into distinguishable types. But in a commodity-producing society, all labor devoted to commodity production has another, common aspect, the production of exchange-value. In this respect all labor is qualitatively the same, since exchange-value appears as a uniform phenomenon without particular qualities. Marx uses the term "abstract" for the exchange-value-producing aspect of labor. At one level, this is merely a definition. But Marx points out that with the widespread development of commodity production under capitalism, abstract labor becomes a real phenomenonin statistics, in the market, and in the planning of capitalist producers. Labor is differentiated not only by its concrete qualitative type, but by its levels of skill, experience, and productivity. If we are to regard exchange-value as being produced by labor, we must make an appropriate adjustment for these differences. Marx follows, and slightly expands upon, Ricardo in arguing that it is possible to reduce more skilled and more productive, that is, "complex," labor to a single common denominator, which he calls "simple" labor. Thus an hour's labor time of a highly experienced and skilled metalworker may count as the equivalent of two or three hours of simple labor, and may add two or three times as much value to the commodity being produced. The theory of the commodity alerts us to the fact that labor can be expended outside the exchange system altogether, on private producThe Severest Critic / 107 tion, such as house or car repair, child care, or meal preparation. This labor surely produces use-valuesin fact, use-values that may substitute for the consumption of commoditiesbut it does not produce exchange-value because the products never enter the market and thus do not become part of the social division of labor. Marx calls labor expended on commodities that are exchanged "social" labor. Clearly, private labor by definition does not produce exchangevalue. Finally, Marx points out that the mere wasteful expenditure of labor in and of itself does not increase the exchange-value of the product. A capitalist producer who lavishes unnecessary labor on a product cannot sell it for any higher price than his competitor who achieves the same quality with a smaller expenditure of labor. The exchange-value of commodities, in Marx's view, is regulated by the amount of labor "necessary" to produce the commodity using current good-practice technology and methods. Labor expended in excess of this standard produces no exchange-value and thus is simply wasted. The labor theory of value tells us that the simple, social, necessary labor time expended in an economy over a year, if we can measure it, is expressed in the money value added to the mass of commodities produced. In terms of the income statement of a capitalist firm, the money value added is just the sales revenue less the cost of raw materials and means of production purchased from other firms, and thus equals wages plus gross profits. (The money value added for a whole economy is closely approximated by its Gross Domestic Product.) The ratio of the money value added to the labor time expended is the quantitative measure of the amount of exchange-value that labor creates in the economy in a given period. To give an example, the GDP of the U.S. economy in 2005 was about 12 trillion dollars, and the employed labor force of about 150 million persons worked an average of 1600 hours per year. The total 108 / ADAM'S FALLACY labor time (making no correction for complex labor) comes to about 240 billion hours; thus each hour of labor produced on average about $50. Marx constantly uses this method of translating from labor time to its money equivalent throughout Capital. This "monetary expression of labor time" has the same units as a wage, dollars per hour, but it is not the same as the wage. The monetary expression of labor time tells us the whole money value added per hour of labor, but workers, as Marx's theory will emphasize later, get only a part of this back in the form of wages. The average wage is typically only a fraction of the monetary expression of labor time.

The Working Day Marx uses the metaphor of the "social working day" to explore the issues raised by his class analysis of capitalist society. He asks us to imagine the whole labor time of a society as a single grand working day. (Of course, we could just as well think of a working year or any other particular unit of time.) The labor theory of value postulates that this working day is proportional to the value that labor adds to commodities. It is important to see that Marx implicitly assumes here that all production is exchanged through the market and takes the form of commodities. From the point of view of social reproduction, the working day is divided into the labor time necessary to produce the subsistence goods workers require to reproduce themselves (necessary labor time), on the one hand, and the labor time devoted to the production of surplus (surplus labor time), on the other. From the point of view of the labor theory of value, the necessary labor time corresponds to the wage portion of the value added, and surplus labor time corresponds to the surplus-value part of value added.3 118 / ADAM'S FALLACY 3. If the social working day is 8 hours, the monetary expression of labor time is $40/hour, and the average wage is $20/hour, the necessary labor time will be 4 hours, and the surplus labor time 4 hours. Total value added is $480 per worker, of which $240 goes to wages. In class terms, Marx calls the part of the working day that corresponds to wages "paid" labor time, and the part that corresponds to surplus value "unpaid" labor time. He does not mean, of course, that workers get paid wages for only the first 4 hours of their working day; they receive wages for all 8 hours. But the labor time represented by the wage is only a fraction of the labor that the workers actually perform. The image of the working day represents the distribution of waged labor time, the labor performed in society as the result of the sale of labor-power as a commodity. In reality, however, social labor time includes non-waged labor time, such as housework and child care. Thus the whole social labor time is larger than the value added or the waged labor time, and the necessary labor time to reproduce society is bigger than the paid labor time of waged workers. As commodity production spreads through the society, more and more necessary social labor becomes waged labor, extending the waged working day. (See the graphic presentation on pp. 246-249.) Absolute Surplus Value Marx argues that the root of surplus value is the extension of the working day beyond necessary labor time. In historical terms, capitalism arises in societies with relatively primitive technologies, in which people, left to themselves and with access to the means of production, will work only the minimum time necessary to produce their subsistence. In order for capitalist production to become profitable, the capitalists have to find ways to induce workers to work longer than the necessary social labor time. Marx calls the extension of the working day "absolute surplus value." The length of the working day became a major issue in the political class conflicts of developing capitalism. Labor unions and leftwing political groups found strong working-class support for legal measures to limit the working day. Important elements of capital, particularly large enterprises with the most advanced technologies, The Severest Critic / 119 also supported limits on the working day on the ground that they could absorb the increased costs much more easily than their backward competitors. "Wages and hours" legislation became a centerpiece of labor policy in most industrial capitalist countries. In the United States, for example, the limitation on the working day takes the form of a fine employers must pay to workers for overtime, usually a premium of 50% on the regular wage ("time and a half for overtime"). As we have seen, the necessary labor time is actually the time required to reproduce not just the individual worker but also the worker's family. In this perspective the working day is not only the individual worker's waged labor time, but the labor time contributed by the whole family as the reproductive unit of the working class. Thus the labor of workers' spouses and children contributes to absolute surplus value as well. One aspect of attempts to control exploitation by limiting the working day was the banning or regulation of child labor and the establishment of legal restrictions on the employment of women. The gender bias inherent in this policy contributed to the marginalization of women in the capitalist labor market. An important goal of feminism has been the abolition of these restrictions on the right of women to sell their labor-power on equal terms with men.