Tuesday, January 09, 2007

Variable Labour=Variable Captial

Just when you thought that the American worker could not get squeezed for any more juice, major retailers have come up with a new cost-savings innovation to apply more pressure on their workforce. Indeed, staffing is the latest area where big retailers like Wal-Mart, Target, and Payless hope to wring out a few pennies with new operational efficiencies.

Major features in the Wall Street Journal and the San Francisco Chronicle this week reveal that new computerized scheduling systems will move many American workers from a predictable work shift to staffing based on the number of customers in a store at any given time. The system will allow managers to start the business day with a few employees on hand, then bring in "on call" workers when business picks up during the course of the day. Once commerce lags, the manager can send workers home until further notice. In short, it matches staffing to more closely match customer demand.

"The whole point is workers were a fixed cost, now they're a variable cost," Kenneth Dalto, a management consultant told the Wall Street Journal. "Is it good for workers?" he added. "Probably not."

Labour under capitalism has always been a variable cost, which Marx called variable capital, it is the source of profit. This is an example of the speed up of production and the use of flexible labour time as is done in factories now applied to the social factory of the service/retail industry.

Variable capital means that proportion of capital which is invested in wages, in the purchase of labour-power. Marx called this capital “variable” because it is this proportion of capital which, if it is used wisely may produce a new, surplus value in the course of the labour process, over and above the “necessary labour time” which the worker needs to live and is paid in the form of wages. This investment is the only one which creates new value, because the worker is able to produce more than he needs in order to live.

So for example, let us suppose a worker earns $100 and consumes $1000 worth of materials and components to produce a product which is sold for $1300. This value could be represented as constant capital ($1000) + variable capital ($100) + surplus value ($200). That $200 of surplus value was added to the product solely by the activity of the worker. That is, of the capitalist’s investment of $1100, only the variable capital, $100, expanded.

Marx represented this relation symbolically:

c + v -› c + v + s

The ratio of constant to variable capital, (c/v), he called the “organic composition of capital”; the ratio of surplus value to wages, (s/v), he called the rate of surplus value, or the rate of exploitation of labour, and s/(c + v) the rate of profit.

The contradiction brought out by this analysis is this. Every capitalist works might and main to reduce the wages bill, and turn over as much material as he can, investing in expensive machinery and increasing c to cut labour costs, v; this produces a general increase in the “organic composition of capital”, c/v. However, since it is only the variable capital that produces profit, the result is a falling rate of profit.

Economic Manuscripts: Capital Vol. I - Chapter Eight

Thus all workers produce capital and thus capitalism. This is what made Marx revolutionary, in identifying the proletariat not the capitalist as the source of capitalism. Even if work is not productive in the traditional meaning of producing goods, in the expansion of capitalism into all social relationships, the commodification of all our being, every worker who is also a consumer is the producer and product of capitalism.

It is this social relationship that means all workers, whether in a factory or in retail store, are the greatest threat to the functioning of capitalism. Which is why revolutionaries call for the General (ized ) Strike by all members of society against the system which exploits us as cogs in the machine.

A tip o' the blog to my co-conspirators at News Trolls for this.


Suplus Value

Labour Produces All Wealth

Libertarian Labour

Peter Drucker RIP

It's the Labour Theory of Value, stupid

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