This diary is for discussing chapters 9 and 10 of Capital Volume I by Marx. In it the explication of how surplus value as a concept is viable with certain reasonable, historical assumptions. apologies in advance for diverging from an established format.

Capital is dead labour which, vampire-like, lives only by sucking living labour, and lives the more, the more labour it sucks. (p.342)

The reinvention of the vampire myth in the modern era is not without political overtones.[144] The aristocratic Count Dracula, alone in his castle apart from a few demented retainers, appearing only at night to feed on his peasantry, is symbolic of the parasitic ancien régime. In his entry for “Vampires” in the Dictionnaire philosophique (1764), Voltaire notices how the mid-18th century coincided with the decline of the folkloric belief in the existence of vampires but that now “there were stock-jobbers, brokers, and men of business, who sucked the blood of the people in broad daylight; but they were not dead, though corrupted. These true suckers lived not in cemeteries, but in very agreeable palaces”.[145]

Marx defined capital as “dead labour which, vampire-like, lives only by sucking living labour, and lives the more, the more labour it sucks”.[146] Werner Herzog, in his Nosferatu the Vampyre, gives this political interpretation an extra ironic twist when protagonist Jonathon Harker, a middle-class solicitor, becomes the next vampire; in this way the capitalist bourgeois becomes the next parasitic class.[147]…

We use Kapital V. I as a primary text. This week it’s getting from p.320 to p.350~

Today’s weekly summary uses chapter four from Duncan Foley’s book,1986, Understanding Capital: Marx's Economic Theory, Cambridge MA: Harvard University Press

Chapter 9…

The Theory of Capital and Surplus Value:

Capitalist production is explained with a conceptual space of a labor theory of value (LTV) and a theory of commodity. Capitalist production is human labor organized socially as a special form of commodity production related to a form of value called money. Capitalists (and their firms) operate to make a profit by selling commodities for more money than they pay for inputs used to produce those commodities. They appropriate a surplus value, how can we explain that with LTV? (we will wind up with a conclusion about exploitation) The movement of money and commodities can be described by this diagram:

C — M— C’ 

This could be a single transaction (paradoxically) but in fact it’s a series of such transactions because there is a systematic process of accumulation because of the dynamic relations among the various elements.

The reality of capitalist production is more like this:

M— C— M’ the simplest form of the capitalist movement of value

M— C {MP,LP}… (P) … C’ — M’ = M + M* (Foley 3.2b)

Here the (3.2b) commodities are bought and have inputs to production (P)  that consist of means of production (MP) and labour power (LP), and

The different, produced commodities, which sell for more money that consist of more that what the capitalist laid out as initial outlay M and surplus value M*.

Capitalist circulation corresponds directly to the income and profit/loss statement of a capitalist firm. This is the circuit of capital

Sales: M’ = M + M* = C’ 

Less costs of inputs: M = C

Equals gross profit: M*

The goal is surplus value M* This must be a sum that has the power to create more value. This surplus value making commodity must be the the capacity of workers to do useful work.  Doing useful labor in production is labor power as capacity rather than the actual expenditure of work. That surplus value (as labor) expressive as a wage. The capitalist buys the worker's capacity to do useful labor in exchange for a sum of money which generally reflects the value of labor-power. After that commodity purchase of labor potential, the worker loses claim to product or any part of its value. The remaining part of that contract is the agreement on the conditions under which the labor will be performed. The important point is that labor-power is a commodity in a market for labor. This is different from the feudal commitment to a specific labor process or the contract to a master under slavery. The detachment from landed obligations and the obligation to sell labor power to others providing the necessary means of production are an important historical development. (Duncan Foley Understanding Capital Chapter 4, pp. 31-35) 

How do we apply this to the working day? We need to get a sense of the value of labor-power as labor time equivalent to wage:

w* = mw    (3.4)

where w* is the value of labor power (the number of social labor a worker receives in exchange for his hour of labor power, 

m is the value of money as defined in Chapter 2

w is the money wage the money received for that hour of labor-power

For example, if the wage is $5/hour and the value of money is 1/15 hour per dollar, then the value of labor power is ($5/hour) x (1/15 hour/$) = 1/3 hour of social labor time per hour of labor power.

This division of value (and its addition) can also be expressed as the ratio of surplus value to wages, which Marx calls the rate of surplus value, e:

e = surplus value /wages

   = (1-w*)/w* = (1-mw)/mw

w* = 1/(1+e)      (3.5b)

(Foley p.37-9)

Chapter 10…

The problem of capitalist labor-time (Foley figure 3.1) is whether commodities exchange at their labor values.


In chapter 10 Marx asks us to imagine the whole social labor time as one great “working day” where labor time corresponds to value added in the aggregate in Marx’s theory, so a working day is aggregate value added = certain number of hours of social labor expended in production. As indicated above, the rate of surplus value is greater than 0 and the the value of labor power is “normally” less than 1.

In this chapter the workers in the first part of that working day receive wages equal to the wage. The second part of the working day (corresponds to surplus value) is labor expended by workers for which they receive no equivalent in terms of wages (paid/unpaid labor time). Surplus value is result of unpaid labor time.

For example if the value of money is 1/15 hour per dollar and that the average wage is $7.50/hour. Then the value of of labor-power is ½ hour of social labor per hour of labor power sold, therefore an average worker in an 8-hour day would produce $120 (8 hours x $15/hour) of value added and receives $60 (8 hours x $7.50/hour) in wages. Thus workers making an average wage would receive $4 in terms of wage and work for 4 hours without compensation.

The difference is between socially necessary labor and surplus labor time. The examples Marx uses are the controls over time and the exploitation of labor capacity such as employing children. The importance is the assumption that labor produces the entire value added, even if it seems in the modern context more contingent. It is more obvious in the contemporary context where the mass of expropriated labor is concentrated not simply in wages but uneven development in wage differentials, including race and gender marginalization, as well as flexible production and backwards cost shifting under globalization. The reminder will arrive that constant capital and variable capital not be confused with fixed capital and circulating capital.

Marx expresses the total price of commodities as c+v+s where the markup on costs is

q = s/(c+v)      (Foley 3.7)

Organic composition of capital c/v =(1-k)/k where a fall in k corresponds to a rise in c/v

the markup in costs relates to the rate of surplus value and the composition of capital (noting that e=s/v is the rate of surplus value and k = v/(c+v)  is

q = s/(c+v) = (s/v) [v/(c+v)] = ek      (Foley 3.8)

 (Foley p.40-45)

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