This is a continuation of my last post. In this post, I will address Mr. Bush’s confused analysis of relations at work and in exchange in a situation dominated by a class of employers, which he confusedly analyzes in his April 26, 2017 article published on the Socialist Project website (Basic Income and the Left: The Political and Economic Problems).
As I noted in my previous post, I will show that Mr. Bush, on the one hand, uses Karl Marx’s theory of surplus value for conservative purposes and, on the other, that he fails to connect Marx’s theory of “costs” to Marx’s theory of surplus value–a connection that has radical implications. Such implications, at the practical level, permit us “to focus on strategies that can help us build the power we need to achieve economic justice and dignity for all”–that really go beyond the class power of employers rather than the pseudo-radicalism offered by Mr. Bush’s “messy business of material reality.”
In the section of that article, entitled “The BI and the Logic of Capitalism,” Mr. Bush has the following to say:
Capitalism operates on the extraction of surplus labour from workers. Workers sell their potential to work on the labour market and employers put them to work, paying them a wage that is less than the value they produce with their labour. This surplus labour is ultimately the source of profits. Capitalism needs workers. Much of the history of capitalism centres around the creation of a working class that is more or less reliant on selling its labour power for a wage in order to live.
If workers in large enough numbers are able to sit outside of the labour market and sustain their basic needs, capitalism would cease to function. BI naively assumes that capitalists and the state would not respond politically and economically to the changing market condition of labour. The logic of capitalism would push capitalists to, at the very least, raise wages and increase prices on goods and services. The ultimate goal would be to compel workers back into the labour market, and make them dependent on selling their labour power in order to live.
It is fascinating to see how a social reformist tries to turn a radical social theory into a conservative one that agrees with his own reformist conclusions. Let us look more closely at this “analysis.”
Firstly, Mr. Bush simply draws a false conclusion: “BI naively assumes that capitalists and the state would not respond politically and economically to the changing market condition of labour.” Some versions of BI may naively assume that, but certainly not a radical version of basic income (see a previous post A Radical Basic Income as a Radical Reform). Mr. Bush simply wants to exclude all consideration of radical basic income policies that go beyond the present system of capitalist system consciously. He likely does so because he wants to draw reformist conclusions from Marx’s radical social theory.
Secondly, let us now turn to how capitalism operates. Mr. Bush claims that the essence of capitalism is the extraction of surplus labour from workers that is greater than the wage that the workers receive. For example, if workers at a brewery work for seven hours a day, and they receive a wage of $35 an hour, then if for every hour they produce a value of $70 an hour, they are exploited 100 percent. If they produce a value of $105 an hour they are exploited 150 percent, and so on. The point is that if there is to be a profit, the workers must produce more than the cost of their own wage, or the $35 an hour.
The problem with this view is that it is only a partial truth, or a one-sided view of what Mr. Bush calls “the messy business of material reality.” Mr. Bush evidently prides himself in being practical, and yet he fails to link up his reference to costs (referred to in my previous post) and the theory of surplus value.
Workers are costs to employers, and the worker receives the cost of what is required to produce “their potential to work” as Mr. Bush says. They receive, apparently, their full value, in exchange, for their wage. They certainly do so when considered only in the immediate exchange between the employer and the workers. Mr. Bush, however, excludes from consideration the question of time and prior conditions.
I will provide a long quote from Karl Marx since Mr. Bush, without referencing him, provides Mr. Bush with the theory of surplus value–but Mr. Bush omits any consideration of Marx’s theory of costs as it relates to wages–conveniently for Mr. Bush. From Capital: A Critique of Political Economy, volume 1, pages 727-730:
Let us now return to our example. It is the old story: Abraham begat Isaac, Isaac begat Jacob and so on. The original capital of £10,000 brings in a surplus-value of £2,000, which is capitalized. The new capital of £2,000 brings in a surplus-value of £400, and this too is capitalized, transformed into a second additional capital, which in its turn produces a further surplus-value of £80. And the process continues in this way.
We leave out of account here the portion of the surplus-value consumed by the capitalist. We are also not interested, for the moment, in whether the additional capital is joined on to the original capital, or separated from it so that it can valorize itself independently. Nor are we concerned whether the same capitalist employs it who originally accumulated it, or whether he hands it over to others. All we must remember is this: by the side of the newly formed capital, the original capital continues to reproduce
itself and to produce surplus-value, and this is true of all accumulated capital in relation to the additional capital engendered by it.
The original capital was formed by the advance of £10,000. Where did its owner get it from? ‘From his own labour and that of his forefathers’, is the unanimous answer of the spokesmen of political economy.4 And, in fact, their assumption appears to be the only one consonant with the laws of commodity production.
But it is quite otherwise with regard to the additional capital of £2,000. We know perfectly well how that originated. There is not one single atom of its value that does not owe its existence to unpaid labour. The means of production with which the additional labour-power is incorporated, as well as the necessaries with which the workers are sustained, are nothing but component parts of the surplus product, parts of the tribute annually exacted from the working class by the capitalist class. Even if the latter uses a portion of that tribute to purchase the additional labour-power at its full price, so that equivalent is exchanged for equivalent, the whole thing still remains the age-old activity of the conqueror, who buys commodities from the conquered with the money he has stolen from them.
If the additional capital employs the person who produced it, this producer must not only continue to valorize the value of the original capital, but must buy back the fruits of his previous labour with more labour than they cost. If we view this as a transaction between the capitalist class and the working class, it makes no difference that additional workers are employed by means of the unpaid labour of the previously employed workers. The capitalist may even convert the additional capital into a machine that throws the producers of that capital out of work, and replaces them with a few children. In every case, the working class creates by the surplus labour of one year the capital destined to employ additional labour in the following year.5 And this is what is called creating capital out of capital.
The accumulation of the first additional capital of £2,000 presupposes that a value of £10,000 exists, advanced by the capitalist, and belonging to him by virtue of his ‘original labour’. The second additional capital of £400 presupposes, on the contrary, only the prior accumulation of the £2,000, of which the £400 is the capitalized surplus-value. The ownership of past unpaid labour is thenceforth the sole condition for the appropriation of living unpaid labour on a constantly increasing scale. The more the capitalist has accumulated, the more is he able to accumulate.
The surplus-value that makes up additional capital no. 1 is the result of the purchase of labour-power with part of the original capital, a purchase which conformed to the laws of commodity exchange and which, from a legal standpoint, presupposes nothing beyond the worker’s power to dispose freely of his own capacities, and the money-owner’s or commodity-owner’s power to dispose freely of the values that belong to him; equally, additional capital no. 2 is merely the result of additional capital no. 1, and is therefore a consequence of the relations described above; hence each individual transaction continues to conform to the laws of commodity exchange, with the capitalist always buying labour power and the worker always selling it at what we shall assume is its real value. It is quite evident from this that the laws of appropriation or of private property, laws based on the production and circulation of commodities, become changed into their direct opposite through their own internal and inexorable dialectic. The exchange of equivalents, the original operation with which we started, is now turned round in such a way that there is only an apparent exchange, since, firstly, the capital which is exchanged for labour-power is itself merely a portion of the product of the labour of others which has been appropriated without an equivalent; and, secondly, this capital must not only be replaced by its producer, the worker, but replaced together with an added surplus. The relation of exchange between capitalist and worker becomes a mere semblance belonging only to the process of circulation, it becomes a mere form, which is alien to the content of the transaction itself, and merely mystifies it. The constant sale and purchase of labour power is the form; the content is the constant appropriation by the capitalist, without equivalent, of a portion of the labour of others which has already been objectified, and his repeated exchange of this labour for a greater quantity of the living labour of others.
The immediate exchange between workers and employers is an exchange of equivalents, so that workers receive the value of their cost of production. However, when considering the larger context of previous production, then the immediate exchange between employer and workers is a semblance. The employer uses a part of the surplus produced by the workers in a previous round as means of production (machines, raw material, buildings, etc.) and another part (socially as money and physically as means of consumption, such as food, clothing, shelter) to further employ them (in addition to the initial investment).
As “costs,” the workers’ previous products are used against them to further exploit them. Mr. Bush entirely ignores this fact. He ignores the wider context. He ignores “the messy business of material reality.” Why is that? Mr. Bush is really quite arrogant. He pretends to be a very practical person, but he is in reality a very impractical person since he disregards the wider context when engaging in practice. Is this not folly?
Furthermore, even when considering the present costs, what is a cost for the employer and what is a cost for the workers do not coincide–that is one of the implications of the concept of surplus value. As George McCarthy (2018) writes in his book Marx and Social Justice Ethics and Natural Law in the Critique of Political Economy, note 50, page 354:
Not understanding the relationship between constant and variable capital in the production process, the bourgeois economists are unable to understand either the rate of surplus value or the rate of profit. Variable capital thus should include both wages and surplus value. However, when viewed only from the perspective of costs, the concept of surplus value disappears
Referring to surplus labour, on the one hand, and then idealizing “costs” as if it were a neutral concept on the other illustrates the confusion of Mr. Bush. Costs for employers and costs for workers by no means coincide.
In a previous post (Intelligent Activity According to John Dewey: Its Political Implications for the Left), I wrote the following:
The lack of such discussion among most workers shows the extent to which those who call for “practice” and believe that they are eminently practical are eminently impractical; they neglect one of the fundamental conditions for practical intelligence: taking into account the social context when acting. To neglect the social context when acting is to act unintelligently.
What exactly is the aim of those who engage in “practice” among the left? Is there any real discussion about the aims? Or is there simply a rush to engage in one “practice” after another without really engaging in any attempt to unify in a consistent fashion the various actions? If so, is that acting intelligently? Or is it acting unintelligently?
Mr. Bush proposes, practically, that the working class engage in unintelligent activity. More colloquially expressed, he proposes (even if he is unaware of this) that the working class act stupidly.
This is hardly in the interests of the working class.
I strongly suggest that Mr. Bush alter radically his theory and practice.
Unfortunately, there is already evidence that he will not do so. On Facebook, he and I engaged in in a short debate over the issue of whether the fight for $15 and an hour (and various employment reforms) should be paired with the concept of fairness (as indeed it was in Ontario). Mr. Bush explicitly stated that it was fair. I argued that such reforms indeed should be defended–while criticizing any concept of fairness.
My prediction for Mr. Bush’s future is that he will end up with a similar attitude to Mr. Urkevitch (see an earlier post, Comments from John Urkevich, AESES-UM Business Agent, to my Critique of the Grievance and Arbitration Procedure: Letter to the Editor, Inside The Association of Employees Supporting Educational Services (AESES), Vol. 17, No. 4, May 1994). He will become a staunch defender of practice within the status quo of the employer-employee relation–like Mr. Urkevitch and many other union representatives.
It should be remembered that Mr. Bush is seen by many in Toronto, the largest city in Canada, as a practical leftist, a socialist and a good trade-unionist. That his views have not received any critical scrutiny illustrates the dominance of social-reformist leftism in Canada and the need for the creation of a more critical but also practical leftism in Canada in general and Toronto in particular.