Introduction
I started to work on calculations of the rate of exploitation of workers in various specific large employers in Canada and in major cities throughout Canada (see for example The Rate of Exploitation of AB (Anheuser-Busch) InBev NV (Including Labatt) Workers). I have started a project on trying to calculate the rate of exploitation of all Canadian workers in particular industries as well as in the Canadian economy as a whole. This project will undoubtedly take many years to develop at a more complete level, but I will post some results occasionally for political reasons.
In this post, I will present a preliminary calculation of the rate of exploitation of food manufacturing workers.
Undoubtedly, the calculations can be improved methodologically (how to proceed in dealing with Stats Canada statisics within a Marxian framework).
It has been my experience that calls to help improve my calculations fall on deaf ears, but if any do find the methodology or the calculations questionable, please do make comments (and provide reasons for the criticisms).
The Nature and Political Relevance of the Rate of Exploitation: Exposing the Real Nature of Capitalism
Having recently engaged in a radical leftist political organization in Toronto, I realized that most of the radical left have little interest in understanding the nature of the exploitation of workers according to Marxian theory. They assume that they do know what it is sufficiently–and engage in practices that I doubt will contribute to its abolition.
I am hardly questioning their intentions or sincerity–but intentions and sincerity are hardly sufficient for overcoming the class power of employers and the associated economic, political and social structures. Marx died almost 150 years ago–and capitalism still exists. Both Luxemburg and Lenin died over a century ago–and capitalism still exists. Capitalism seems to possess characteristics that enable it to have staying power.
If the diagnosis or definition of the problem is faulty, then proposed solutions will also likely be faulty. Thus, if someone diagnoses a sick person as suffering from bacterial infection, and prescribes antibiotics, but in reality the sick person is suffering from some form of viral infection, the solution will not address the problem.
In the early 20th century, many leaders of the radical left were steeped in Marxian economics (Lenin wrote a book called The Development of Capitalism in Russia–I only read some of it a long time ago); Rosa Luxemburg wrote a book called The Accumulation of Capital (I have not read it).
There needs to be a balance between theory and practice (I lack practical skills, to be sure, when compared to many radical leftists who engage in practice, and my theoretical knowledge is also limited–but less so than many who engage mainly in practical activity).
Statistical or empirical investigations should also be considered since theory needs to be fleshed out if it is to be tested. Statistical investigations may (though hardly need) prevent theory from soaring into a world of its own ideal making.
In any case, in Marxian economics, concepts are designed to expose the real nature of capital and the false appearances that the nature of capital itself generates. As Marx wrote in volume three of Capital:
all science would be superfluous if the form of appearance of things directly coincided with their essence.
For instance, let us consider two rates, the rate of profit, which measures for the capitalist the degree of surplus of value her/his total capital generates in a period of time, and the rate of surplus value or the rate of exploitation, which measures the relation between one part of the new value generated only by labour (a surplus of value) and the other part of new value generated only by labour (variable capital–the equivalent in general of the wage and benefits of workers). The rate of profit is expressed as s/(c+v), where s=a surplus of value, c=constant capital (the capital invested in machines, supplies, buildings, raw materials, computers and so forth) and v=variable capital–the money advanced to hire workers. The rate of surplus value or the rate of exploitation is s/v.
The rate of profit not only underestimates the rate of exploitation since in the case of the rate of profit the surplus value is related to total investment (c+v) and not just to v. Furthermore, it makes the surplus value appear to derive from both constant capital and variable capital.
This particular divergence of reality (a surplus of value deriving only from labour but appearing to emerging from both constant capital and variable capital) is only one of many different ways in which reality and appearance diverge in a capitalist society.
This divergence is politically relevant since the consciousness of workers is influenced by appearances. If they are going to organize themselves against capital, they will have to come to understand the reality of capital and not act only on the basis of its appearances.
Marx, however, did consider that workers did often act according to appearances–especially the appearance of capitalist society appearing in various ways as natural. From Capital, volume 1:
The advance of capitalist production develops a working class which by education, tradition and habit looks upon the requirements of that mode of production as self-evident natural laws.
The rate of exploitation or the rate of surplus value is not just a formula: it is a means of countering the illusion of labour not being exploited and the illusion of a surplus of value being generated from both c and v.
More generally, politically, this is necessary since social democrats here in Toronto (and undoubtedly elsewhere) vaguely refer to “fair wages,” “equitable treatment,” “dignified treatment” and similar union cliches. Calculating even approximately the rate of exploitation at both a micro and macro levels thus has political relevance.
The radical political organization referred to above seems to focus on the one hand, on organizing workers and, on the other, on so-called political struggle , and yet it does not address how such struggle is going to overcome the divergence in the consciousness of workers between appearance and reality. Political struggle in general and the political strike in particular form the general strategy–without recognizing that part of the nature of capital–part of the nature of the enemy–is that it generates objective illusions about its own nature. I think Marx understood better the enemy than many radical political organizations. The enemy is not just the class of employers but the general structure or organization of production and exchange.
Another Example of Exposing the Real Nature of Capitalism: The Objective Illusion of the Equivalent Exchange of the Commodity Workers Sell to the Capitalist
I was going to reserve the following to the end of this post on some possible research projects that involve statistical investigation using Statistics Canada data, but I now believe it is appropriate to introduce it in an introduction since it has political relevance.
Now, the rate of surplus value or the rate of exploitation is constituted by two elements, s and v. And v seems to be the equivalent in value that workers receive (as wages and benefits) for the commodity they sell–what Marx calls labour power. This is true when considering how capital makes workers produce a surplus of value. However, when we consider the accumulation of capital, reality is different. The radical left evidently simply ignores the accumulation of capital as relevant for exposing the real nature of capital.
It now becomes necessary to resort, briefly, to some further Marxian economic theory explicitly before addressing what kind of empirical research would be politically relevant for the working class.
Chapter 24 of volume one of Marx’s Capital has the following chapter title and first section heading, respectively:
Chapter 24: The Transformation of Surplus Value into Capital
I. CAPITALIST PRODUCTION ON A PROGRESSIVELY INCREASING SCALE. THE INVERSION WHICH CONVERTS THE PROPERTY LAWS OF COMMODITY PRODUCTION INTO LAWS OF CAPITALIST APPROPRIATION
One of the laws of commodity production is equivalent exchange so that the worker receives an equivalent value of the commodity s/he costs to produce. However, as Marx implies in the first section heading, there is an inversion of the property laws of commodity production.
I am not going to go into detail about this issue now, but I will look at the issue briefly to show the area of research relevant politically when the accumulation of capital arises (surplus value produced is itself invested) (how capital is produced and not just how surplus capital arises from capital exploiting workers in a particular production process). As Marx wrote:
Earlier we considered how surplus-value arises from capital; now we have to see how capital arises from surplus-value. The employment of surplus-value as capital, or its reconversion into capital, is called accumulation of capital.
Suffice to say that the accumulation of capital has both a “forward” (future) movement and simultaneously a backward (past) movement. Obviously, if the capitalist invests part of the surplus value, there will be a future process of equivalent exchange and subsequent exploitation and oppression of workers.
However, surplus value is never invested just in workers; a part of what is invested must be invested in machinery, buildings, computers, raw material, supplies and so forth. But the implication of this is that the additional means of production purchased are the result of earlier exploitation of workers. But so too are the additional means of subsistence (consumer goods). The money that workers receive to purchase consumer goods (the wage) is a result of an earlier round of accumulation of capital.
As more and more rounds of accumulation of capital occur, the original investment made by the capitalist becomes a dwindling amount compared to the growing amount of accumulated capital. The equivalent exchange of values characteristic of commodity exchange, when it comes to the accumulation of capital, become inverted so that the equivalent exchange between workers and the capitalist becomes increasingly a merely apparent exchange of equivalents. From the same chapter of Capital (a somewhat long quote, to be sure–it will be the last part of theory):
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. Originally the rights of property seemed to us to be grounded in a man’s own labour. Some such assumption was at least necessary, since only commodity-owners with equal rights confronted each other, and the sole means of appropriating the commodities of others was the alienation of a man’s own commodities, commodities which, however, could only be produced by labour. Now, however, property turns out to be the right, on the part of the capitalist, to appropriate the unpaid labour of others or its product, and the impossibility, on the part of the worker, of appropriating his own product. The separation of property from labour thus becomes the necessary consequence of a law that apparently originated in their identity.
The power of capital over workers increases as investment in means of production grows–workers face the results of their own labour as a growing alien power confronting them, and their own wage is derived from surplus value previously extorted from them in the past and used to hire them in the present.
Near the end of this post, I point out one possible research project that has political relevance for the working class. Just to anticipate, I will quote one paragraph from that section:
A more precise characterization of the project would have to be devised, but if carried out, it would aim to show that unions’ use of the cliche “fair wages” has little basis in the context of capitalist accumulation since the wages workers receive today are derived from surplus value they produced earlier. It is the existence of a contract, among other things, which hides this fact. Similarly, if fair wages is an ideological expression that hides the exploitation and oppression of workers, then the cliche of a “fair contract” also is an ideological expression that hides the exploitation and oppression of workers.
In the context of unionized workplaces, the contract is the collective agreement. Unions, by using such phrases as “fair wages,” “fair contracts” and other such cliches essentially cling to the objective illusion of the lack of exploitation of workers. Of course, there is no denying that collective agreements, generally, provide some protection to workers and are preferable to no collective agreement–but the idealization of such collective agreements by union reps and the lack of criticism of their limitations in general and the management rights clause of such contracts in particular by the radical left feed into the objective illusion that such contracts can somehow magically convert the class relation of capital to workers as a class into something “fair.” It does the working class no good to be mere extensions of union rhetoric.
Here is an example of the rhetoric of union reps in the food manufacturing industry. Understanding that workers are exploited not just as they produce a surplus of value but even their wages and benefits are advanced from previous rounds of exploitation enables workers to see through this rhetoric and compare it to the reality of their lives (bolded words are generally my emphasis):
From August 14, 2024 (https://www.ufcw.org/actions/victories/gay-lea-food-cooperative-workers-join-ufcw-canada/?utm_source=chatgpt.com):
“Belonging to UFCW Locals 175 and 633 is more than just membership,” said President of UFCW Local 175 Kelly Tosato. “This local union is about a commitment to solidarity, mutual support, and collective strength. As new members, these workers now have a powerful voice in advocating for better working conditions, fair wages, and the respect they deserve. Together, we can achieve meaningful changes that will benefit these workers now and in the future.”
As a preliminary point, is the following an example of being treated with “respect”? From Collective Agreement Between Maple Leaf Consumer Foods (Courtney Park) and United Food and Commercial Workers Local 175, May 1, 2024-April 30, 2027, pages 3-4:
ARTICLE 4 – MANAGEMENT RIGHTS
4.01 The Union recognizes and acknowledges that subject to the provisions of this agreement, the management of the business enterprise and direction of the working force are fixed exclusively with the Employer. Without restricting the generality of the foregoing, the Union acknowledges that it isthe exclusive function of the Employer to:(a) Maintain order, discipline, efficiency and safety and to make, alter and enforce from time to time, reasonable rules and regulations, policies and practices to be observed by its employees;
(b) Hire, promote, demote, classify, transfer, and layoff.
(c) Discharge, suspend, or otherwise discipline employees for just cause;
(d) Generally to manage the processing enterprise in which the Employer is engaged and without restricting the generality of the foregoing, to determine the number and location of Plants, the methods of production, the schedule of production, the kind and operation of machines and equipment to be used, the process of production, the formulating of products, and the control of material to be incorporated into products, and to establish standards of quality and quantity for all equipment and operations; and extend, limit, curtail or cease operations or services of any part thereof.
This is a concentration of decision-making power in the hands of management–a minority–over the majority–the workers. Management direct workers what to do, when to do it and how to do it–except as limited by the collective agreement (and relevant legislation). Is this what is meant by workers receiving the “respect they deserve?” Do not workers deserve to be able to make decisions that affect their lives? In other words, do they not deserve to manage the economy democratically.
The management rights clause is one clause in the collective agreement that probably has the most potential for exposing the contradiction between what the contract between workers and capitalists (employers) appears to be (a relation based on free will and equality among the contracting parties) and the reality of that relation–a relation based on economic coercion and inequality.
What are the radical left doing to dispel the objective illusion of a collective agreement expressing being treated in a dignified manner?
This situation, rather than being a relation of respect, is a relation of oppression since workers are used as things (means) for purposes which they as a collectivity do not define (see The Money Circuit of Capital). Does that express a respectful relation? Management rights clauses (implied or explicit in collective agreements give management as representative of employers–and as a minority–the power to dictate to workers what to do, when to do it, how to do it and so forth–and is not the imposition of the will of a minority over the majority a dictatorship? (See Employers as Dictators, Part One). Is that an expression of a respectful relation? Do union reps ever explain how a collective agreement somehow expresses a respectful relation?
As for “fair wages,” as we will see, food manufacturing workers are exploited by producing a surplus of value (profit). Is that what Tosato means by a “fair wage?” Can workers receive a “fair wage” if they are necessarily exploited?
Many union reps think that they can just throw out such phrases without having to justify them–such a lack of accountability on the part of such union reps needs to be constantly criticized.
If brewery workers, food manufacturing workers and employees in general are exploited or at least oppressed, then any reference to “respect” and “fair wages” and similar high-sounding ethical phrases is simply ideology that hides such exploitation and oppression beneath union rhetoric.
Conclusions First
As usual, I start with the conclusion in order to make readily accessible the results of the calculations for those who are more interested in the results than in how to obtain them.
The Rate of Exploitation of Food Manufacturing Workers
So, with these adjustments in place, we are now in a position to calculate the rate of exploitation of Canadian food manufacturing workers:
s=$9,118,449,000
v=$16,875,919,000
s/v=9,118,449,000/16,875,919,000=0.5403=54% after rounding down
That means that for every hour of necessary labour—the time during which the worker produces the equivalent of her or his wage—the worker performs approximately 32 additional minutes of surplus labour for the food-manufacturing companies.
That means that for every hour worked that a food manufacturing worker produces her/his wage, s/he works around an additional 32 minutes for free for companies involved in food manufacturing in Canada. It also means that, for every hour worked, a food manufacturing worker works around 39 minutes to produce her/his wage or salary and around 21 minutes for free for food manufacturing companies located in Canada.
Of course, during the time that the worker produces her/his own wage, s/he is subject to the power of management and hence is unfree (see, for instance, Management Rights, Part Four: Private Sector Collective Agreement, Ontario and Employers as Dictators, Part One).
To gain an idea of what total exploitation of Canadian food manufacturing workers looks like per day, I use the same lengths of the working day as the Maple Leaf Foods case: 6, 7.5, 8, 10 and 12.
In a 6-hour (360 minutes) work day, the worker produces her/his wage in 3 hours 54 minutes (234 minutes) and works 2 hours 6 minutes (126 minutes) for free for food manufacturing companies located in Canada.
In a 7.5-hour (450 minutes) work day, the worker produces her/his wage in 4 hours 52 minutes (292 minutes) and works 2 hours 38 minutes (158 minutes) for free for food manufacturing companies located in Canada.
In an 8-hour (480 minutes) work day, the worker produces her/his wage in 5 hours 12 minutes (312 minutes) and works 2 hours 48 minutes (168 minutes) for free for food manufacturing companies located in Canada.
In a 10-hour (600 minutes) work day, the worker produces her/his wage in 6.5 hours (390 minutes) and works 3.5 hours 35 minutes (210 minutes) for free for food manufacturing companies located in Canada.
In a 12-hour (720 minutes) work day, the worker produces her/his wage in 7 hours 48 minutes (468 minutes) and works 4 hours 12 minutes (252 minutes) for free for food manufacturing companies located in Canada.
Political Considerations and Conclusion: Does the Existence of a Union and a Collective Agreement Abolish the Exploitation and Oppression of Workers?
Again, the rate of exploitation measures the extent to which workers work for free, producing all the surplus value and hence all the profit for employers. However, even during the time when they work to produce their own wage, they are hardly free. They are subject to the power and dictates of their employer during that time as well.
Do you think that these facts contradict the talk by the left and unionists of “fair wages,” “fair contracts” and “decent work” (see for example Fair Contracts or Collective Agreements: The Ideological Rhetoric of Canadian Unions, Part Three: Unifor (Largest Private Union in Canada) for the rhetoric of the largest private-sector union in Canada, Unifor? Do they ignore the reality of life for workers, whether unionized or non-unionized?
If exploitation and oppression of workers is a constant in their lives, even if they are only vaguely aware of it, should this situation not be frankly acknowledged by their representatives? Do such representatives do so? If not, why not? Do workers deserve better than neglecting the social context within which they live and work? Should such problems be addressed head on rather than neglected?
Even if workers were not exploited, they would still be oppressed since they are used as things (means) for purposes which they as a collectivity do not define (see The Money Circuit of Capital). Does that express something fair? Management rights clauses (implied or explicit in collective agreements give management as representative of employers–and as a minority–the power to dictate to workers what to do, when to do it, how to do it and so forth–and is not the imposition of the will of a minority over the majority a dictatorship? (See Employers as Dictators, Part One). Is that fair? Do union reps ever explain how a collective agreement somehow expresses something fair? Is that fair?
Should workers not be discussing why management has such rights? Should workers not be discussing whether an unelected management should have such rights? Should workers not be discussing how to organize to abolish this dictatorship? Should workers not be criticizing any union rep who claims that a collective agreement somehow expresses a “fair contract?” A “good contract?” A “decent job?” A “good job?” All other such platitudes?
How does the existence of a collective agreement turn the exploitative and oppressive situation of workers into one where they have a “fair contract” and “decent work?” Unions can limit exploitation and can control some aspects of their working lives, but in principle workers are things to be used by employers even with unions. This does not mean that a non-unionized environment is the same as a unionized environment. With unions that are independent of particular employers, that is to say, are real unions, there is a greater opportunity for workers to develop organizations of resistance against the power of particular employers.
Workers and not just unions, however, cannot resist the power of the employers as a class unless workers organize as a class, and furthermore they cannot change the situation unless they themselves realize the limitations of their own local, regional and national organizations when faced with the power of the class of employers (and the government that supports them), teach that to their members and are open persistently to criticism from below. In addition, unless they start to organize as a class with the aim of eliminating the class power of employers, they will be subject to a back-and-forth movement of reform and counter-reform (see Anti-Neoliberalism Need Not Be Anti-Capitalist: The Case of the Toronto Radical John Clarke, Part Four: The Welfare State and Neoliberalism, or The Infinite Back and Forth Movement of Capitalism).
The ideology of unions–that somehow they can produce a “fair contract” and “decent work”–needs, though, to be constantly criticized. Workers deserve better than the acceptance of such ideology by the social-democratic or social-reformist left.
The collective agreement–like any employment agreement between workers and employers–fosters the illusion that the workers are paid for the whole working day and hides the economic coercion behind the “agreement” or contract.
Should not the left be constantly exposing this? Is it? What do you think?
Limitations of This Calculation
In addition to some limitations pointed out below in the section on the data used, a more precise calculation of the rate of exploitation would involve the division of the various industries in the input/output table into productive labour (labour that produces a surplus of value in the form of commodities) and labour that is involved in the purchase and sale of those commodities (commercial labour); productive labour produces all the surplus value whereas commercial labour realizes the value of the commodities. Such a division may well increase the rate of exploitation of those who produce surplus value, but to determine such a division requires further steps. Since I do not yet know how to make such a division yet, I will leave such calculations for posts in the somewhat distant future.
If others have suggestions on how to do that, I would most appreciate it.
Data on Which the Calculation Is Based
The calculation of the rate of exploitation is undoubtedly imperfect, and I invite the reader to correct its gaps. Nonetheless, the lack of any attempt to determine the rate of exploitation has undoubtedly reinforced social-reformist tendencies.
I downloaded both 2023 and 2019 input/output tables from Stats Canada (actually, I sent a request for the tables and Stats Canada sent them to me). I decided not to use the 2023 data since Covid would distort the calculation of the rate of exploitation to a substantial degree.
The input/output tables illustrate or describe the Canadian economy as a whole in some detail by showing what industries sell to other industries (rows) (as well as final consumers) and what industries purchase from other industries (columns).
For example:
| Supplier \ Buyer | Auto | Steel | Households |
|---|
| Steel | 1,000 | 0 | 50 |
| Labor | 500 | 200 | 0 |
| Auto | 0 | 0 | 2,100 |
Explanation:
-
Rows = suppliers, columns = buyers.
-
Steel supplies 1,000 to autos, 0 to itself and 50 to households.
-
Labor-power (the commodity the worker sells–the capacity to work–a capacity that is just that, a capacity that requires material conditions for its realization) is an input to both autos (500) and steel (200) but 0 in households.
- Auto outputs 2,100 to households.
There are several industries that constitute food manufacturing in the 2019 i/o tables, and the tables show what input are used in the provision of food manufacturing. They also contains, near the end of the table, the following (all numbers are in thousands of Canadian dollars) (I was going to exclude the industry “Animal food manufacturing” since I assume that the concept of “Food manufacturing” is conceived by workers as referring to food for human beings, not non-human beings. However, if I have to work with the aggregate category “Food manufacturing” in the future from Statistics Canada, the data would not be consistent. Therefore, I have retained this industry in the calculation.)
I have split the nine industries into two tables for readability (the reader would have to scroll horizontally if I included all nine industries together). The total refers to the total of the nine industries for each of the six categories.
Table 1.1 (in thousands of dollars)
| BS311100 | BS311200 | BS311300 | BS311400 | BS311500 | ||
| Animal food manufacturing | Grain and oilseed milling | Sugar and confectionery product manufacturing | Fruit and vegetable preserving and specialty food manufacturing | Dairy product manufacturing | ||
| PRM300000 | Subsidies on production | -2,974 | -2,197 | -4,024 | -6,661 | -12,317 |
| PRM400000 | Taxes on production | 19,732 | 22,719 | 20,387 | 38,246 | 52,591 |
| PRM500000 | Wages and salaries | 674,399 | 542,294 | 672,577 | 1,050,877 | 1,607,016 |
| PRM600000 | Employers’ social contributions | 146,180 | 158,597 | 245,480 | 356,354 | 691,442 |
| PRM700000 | Gross mixed income | 4,368 | 1,746 | 2,867 | 3,079 | 4,446 |
| PRM800000 | Gross operating surplus | 704,207 | 1,190,838 | 654,794 | 949,989 | 1,334,033 |
Table 1.2 (in thousands of dollars)
| BS311600 | BS311700 | BS311800 | BS311900 | Total for all 9 industries | ||
| Meat product manufacturing | Seafood product preparation and packaging | Bakeries and tortilla manufacturing | Other food manufacturing | |||
| PRM300000 | Subsidies on production | -17,589 | -5,533 | -9,741 | -8,845 | -69,881 |
| PRM400000 | Taxes on production | 88,650 | 19,271 | 48,481 | 36,704 | 346,781 |
| PRM500000 | Wages and salaries | 3,523,770 | 839,754 | 2,216,744 | 1,773,450 | 12,900,881 |
| PRM600000 | Employers’ social contributions | 1,151,548 | 183,902 | 632,838 | 408,697 | 3,975,038 |
| PRM700000 | Gross mixed income | 13,225 | 996 | 21,503 | 22,149 | 74,379 |
| PRM800000 | Gross operating surplus | 2,861,696 | 494,904 | 1,505,202 | 1,726,886 | 11,422,549 |
Calculation of Variable Capital (v)
For an explanation of the above table, I start with the categories “Wages and salaries” and “Employers’ social contributions.” These two, when added together, form the calculation of variable capital, or what it costs the employers to purchase the commodity labour power (the capacity to use the means of production owned by employers).
(in thousands of Canadian dollars)
16,875,919 [12,900,881+3,975,038=16,875,919]
Calculation of Net Operating Surplus (NOS) (Surplus Value)
The last category “Gross operating surplus” (GOS) is the total profit before depreciation of fixed capital (factories, mixers, crushers, slicers, etc. that last longer than one year and still have value after one year but lose part of their total value during the year to the gross value of the output (that is why it is called “gross”).
In Marxian theory, the value (c) of the fixed capital used in production is little by gradually transferred by workers to the commodity produced (bread, meat, sugar, etc.). The value of fixed capital (c) does not form any part of new value added (s+v), so it must be deducted from the total value of the commodity to obtain value added.
For the purposes of this calculation, I use Statistics Canada’s consumption of fixed capital (CFC) as an empirical approximation to the portion of the value of fixed capital transferred to the year’s output. Consequently, it must be deducted or subtracted from gross operating surplus to give us net operating surplus (nos), the total surplus value actually produced by food manufacturing workers. If depreciation is not subtracted, then the total surplus value calculated is overestimated, giving an inaccurate rate of exploitation.
To calculate more precisely this part of c (raw material used and consumed completely during the production process forms the other part of c) requires an involved process which I have just learned, at least sufficiently, to use.
I used the Statistics Canada Table 36-10-0096-01 Flows and stocks of fixed non-residential capital, by industry and type of asset, Canada, provinces and territories (x 1,000,000) (https://www150.statcan.gc.ca/t1/tbl1/en/tv.action?pid=3610009601), Canada, 2019, current prices, geometric depreciation (AI clarified the three kinds of depreciation available for the file:
Method Assumption Pattern of depreciation
Linear (straight-line) Asset loses the same value every year Equal amount each year
Geometric (declining balance) Asset loses more value when new, less as it ages High at first, then declines
Hyperbolic Asset provides nearly constant productive services for much of its life, then deteriorates more rapidly near the end Low at first, increases relatively later).
I used geometric depreciation because it is the form of depreciation typical of cars–asset values decrease rapidly at first and then decline more slowly after the initial rapid depreciation and, in addition, the new fixed capital likely experiences greater wear and tear at first and then more slowly decreases.
It should be remembered that just because a machine and other physical equipment may be useful physically, from the capitalist point of view, if it does not meet social standards of productivity in that industry, it may be capitalistically useless since the issue is socially necessary labour time and not absolute concrete labour time.
Depreciation amount on GOS
GOS=11,422,549
Depreciation (or cfs)=2,581,000
NOS Before Taxes and Subsidies on Production
8,841,549=NOS=GOS-CFC=11,422,549-2,581,000=8,841,549]
To NOS must be added “Taxes on production” since the taxes reduce the actual surplus value produced (they make it appear that there is less surplus value since the capitalist appropriates less surplus value as some of it goes to the government as taxes on production). On the other hand, “Subsidies on production” must be subtracted since subsidies make the surplus available greater than what was obtained by exploiting workers (since subsidies is already negative, it is only necessary to add the negative number, which is the same as subtracting a positive number).
Adding taxes on production and adding the negative amount of subsidies on production, we have the following:
NOS (Net Operating Surplus) after Depreciation, Taxes & Subsidies
9,118,449 [8,841,549+346,781-69,881=9,118,449]
The Rate of Exploitation of Food Manufacturing Workers
So, with these adjustments in place, we are now in a position to calculate the rate of exploitation of Canadian food manufacturing workers:
s=$9,118,449
v=$16,875,919
s/v=9,118,449/16,875,919=0.5403=54% after rounding down
That means that for every hour worked that a food manufacturing worker produces her/his wage, s/he works around an additional 32 minutes for free for companies involved in food manufacturing in Canada. It also means that, for every hour worked, a food manufacturing worker works around 39 minutes to produce her/his wage or salary and around 21 minutes for free for food manufacturing companies located in Canada.
Of course, during the time that the worker produces her/his own wage, s/he is subject to the power of management and hence is unfree (see, for instance, Management Rights, Part Four: Private Sector Collective Agreement, Ontario and Employers as Dictators, Part One).
To gain an idea of what total exploitation of Canadian food manufacturing workers looks like per day, I use the same lengths of the working day as the Maple Leaf Foods case: 6, 7.5, 8, 10 and 12.
In a 6-hour (360 minutes) work day, the worker produces her/his wage in 3 hours 54 minutes (234 minutes) and works 2 hours 6 minutes (126 minutes) for free for food manufacturing companies located in Canada.
In a 7.5-hour (450 minutes) work day, the worker produces her/his wage in 4 hours 52 minutes (292 minutes) and works 2 hours 38 minutes (158 minutes) for free for food manufacturing companies located in Canada.
In an 8-hour (480 minutes) work day, the worker produces her/his wage in 5 hours 12 minutes (312 minutes) and works 2 hours 48 minutes (168 minutes) for free for food manufacturing companies located in Canada.
In a 10-hour (600 minutes) work day, the worker produces her/his wage in 6.5 hours (390 minutes) and works 3.5 hours 35 minutes (210 minutes) for free for food manufacturing companies located in Canada.
In a 12-hour (720 minutes) work day, the worker produces her/his wage in 7 hours 48 minutes (468 minutes) and works 4 hours 12 minutes (252 minutes) for free for food manufacturing companies located in Canada.
Gross Mixed Income (GMI)
The above omits one category: Gross mixed income. This category reflects the self-employed, who both use (and own or rent) means of production and obtain a profit as well—that is why it is called gross mixed income. There may indeed be a few employees hired, but wages and benefits are already subtracted to obtain gross mixed income.
To incorporate this category adequately into the calculation would require more research. First, it would be necessary to determine the consumption of fixed capital (CFC) in the main calculation and the gross fixed capital stock at the end of 2018 and at the end of 2019. These two stock figures could then be used to calculate an approximate average gross fixed capital stock for 2019. Dividing total CFC by this average stock would give an approximate rate of fixed-capital consumption for the sector. This rate could then be applied to GMI to estimate the amount of CFC attributable to GMI. Subtracting this estimated CFC from GMI would give net mixed income. The resulting net mixed income would then still have to be divided between surplus value and variable capital by making further inquiries into the distribution of workers and/or hours of work, the level of profits, and other probable complications.
Since this category is not a significant amount ($74,379), I decided to omit it. Incorporating it adequately would simply require much more work with probably little change in the rate of exploitation.
If I were analyzing another sector of the Canadian economy, such as construction, where gross mixed income is considerably larger, omitting it could distort the calculation of the rate of exploitation unduly.
Although I will not address the rate of fixed-capital consumption for gross mixed income here, I can nevertheless determine whether the distribution of net mixed income between surplus value and variable capital would have a significant impact on the rate of exploitation. I therefore consider two extreme cases. First, I set surplus value ((s)) equal to zero and treat all of the GMI as variable capital ((v)). Conversely, I set variable capital ((v)) equal to zero and treat all of the GMI as surplus value ((s)).
nos=74,379
Now, if s=0 for gmi, then v=74,379. We add this to the v above, and then divide the unchanged s by the total v.
Total v=$16,875,919+$74,379=16,950,298
s=$9,118,449
So, s/v=9,118,449/16,950,298=53.79% and rounding up=54%–the same as before.
If v=0 for gmi, then we add 74,379 to s and calculate s/v.
Total s=9,118,449+74,379=9,192,828
So, s/v=9,192,828/16,875,919=54.47% or 54% when rounding down–the same as before.
Consequently, the rate of exploitation does not change if s is distributed differently for self-employed individuals.
Political Considerations and Conclusion: Does the Existence of a Union and a Collective Agreement Abolish the Exploitation and Oppression of Workers?
Again, the rate of exploitation measures the extent to which workers work for free, producing all the surplus value and hence all the profit for employers. However, even during the time when they work to produce their own wage, they are hardly free. They are subject to the power and dictates of their employer during that time as well.
Do you think that these facts contradict the talk by the left and unionists of “fair wages,” “fair contracts” and “decent work” (see for example Fair Contracts or Collective Agreements: The Ideological Rhetoric of Canadian Unions, Part Three: Unifor (Largest Private Union in Canada) for the rhetoric of the largest private-sector union in Canada, Unifor? Do they ignore the reality of life for workers, whether unionized or non-unionized?
If exploitation and oppression of workers is a constant in their lives, even if they are only vaguely aware of it, should this situation not be frankly acknowledged by their representatives? Do such representatives do so? If not, why not? Do workers deserve better than neglecting the social context within which they live and work? Should such problems be addressed head on rather than neglected?
Even if workers were not exploited, they would still be oppressed since they are used as things (means) for purposes which they as a collectivity do not define (see The Money Circuit of Capital). Does that express something fair? Management rights clauses (implied or explicit in collective agreements give management as representative of employers–and as a minority–the power to dictate to workers what to do, when to do it, how to do it and so forth–and is not the imposition of the will of a minority over the majority a dictatorship? (See Employers as Dictators, Part One). Is that fair? Do union reps ever explain how a collective agreement somehow expresses something fair? Is that fair?
Should workers not be discussing why management has such rights? Should workers not be discussing whether an unelected management should have such rights? Should workers not be discussing how to organize to abolish this dictatorship? Should workers not be criticizing any union rep who claims that a collective agreement somehow expresses a “fair contract?” A “good contract?” A “decent job?” A “good job?” All other such platitudes?
How does the existence of a collective agreement turn the exploitative and oppressive situation of workers into one where they have a “fair contract” and “decent work?” Unions can limit exploitation and can control some aspects of their working lives, but in principle workers are things to be used by employers even with unions. This does not mean that a non-unionized environment is the same as a unionized environment. With unions that are independent of particular employers, that is to say, are real unions, there is a greater opportunity for workers to develop organizations of resistance against the power of particular employers.
Workers and not just unions, however, cannot resist the power of the employers as a class unless workers organize as a class, and furthermore they cannot change the situation unless they themselves realize the limitations of their own local, regional and national organizations when faced with the power of the class of employers (and the government that supports them), teach that to their members and are open persistently to criticism from below. In addition, unless they start to organize as a class with the aim of eliminating the class power of employers, they will be subject to a back-and-forth movement of reform and counter-reform (see Anti-Neoliberalism Need Not Be Anti-Capitalist: The Case of the Toronto Radical John Clarke, Part Four: The Welfare State and Neoliberalism, or The Infinite Back and Forth Movement of Capitalism).
The ideology of unions–that somehow they can produce a “fair contract” and “decent work”–needs, though, to be constantly criticized. Workers deserve better than the acceptance of such ideology by the social-democratic or social-reformist left.
The collective agreement–like any employment agreement between workers and employers–fosters the illusion that the workers are paid for the whole working day and hides the economic coercion behind the “agreement” or contract.
Should not the left be constantly exposing this? Is it? What do you think?
Limitations of This Calculation
In addition to some limitations pointed out below in the section on the data used, a more precise calculation of the rate of exploitation would involve the division of the various industries in the input/output table into productive labour (labour that produces a surplus of value in the form of commodities) and labour that is involved in the purchase and sale of those commodities (commercial labour); productive labour produces all the surplus value whereas commercial labour realizes the value of the commodities. Such a division may well increase the rate of exploitation of those who produce surplus value, but to determine such a division requires further steps. Since I do not yet know how to make such a division yet, I will leave such calculations for posts in the somewhat distant future.
If others have suggestions on how to do that, I would most appreciate it.
Next Steps
There are several research projects that lie ahead. I will start with the most politically relevant one–and probably the most complex and time-consuming one (if it is possible at all).
1. Above, I pointed out the following:
However, even during the time when they work to produce their own wage, they are hardly free. They are subject to the power and dictates of their employer during that time as well.
The time during which workers produce their wage appears not to be exploitation but rather oppression since they do not produce a surplus value during that time but only the equivalent of their own wage. They appear to receive an equivalent value for the commodity they sell to the capitalist.
This view is correct when considering the production of surplus value but has only limited validity in the context of the accumulation of capital. (It is typical to stop at this insight–how capital produces surplus value, but they ignore the further process of how surplus value is used to produce capital).
It now becomes necessary to resort to some further Marxian economic theory explicitly before addressing what kind of empirical research would be politically relevant for the working class.
Chapter 24 of volume one of Marx’s Capital has the following chapter title and first section heading, respectively:
Chapter 24: The Transformation of Surplus Value into Capital
I. CAPITALIST PRODUCTION ON A PROGRESSIVELY
INCREASING SCALE. THE INVERSION WHICH CONVERTS
THE PROPERTY LAWS OF COMMODITY PRODUCTION
INTO LAWS OF CAPITALIST APPROPRIATION
One of the laws of commodity production is equivalent exchange so that the worker receives an equivalent value of the commodity s/he costs to produce. However, as Marx implies in the first section heading, there is an inversion of the property laws of commodity production.
I am not going to go into detail about this issue now, but I will look at the issue briefly to show the area of research relevant politically when the accumulation of capital arises (surplus value produced is itself invested) (how capital is produced and not just how capital produces surplus value). As Marx wrote:
Earlier we considered how surplus-value arises from capital; now we have to see how capital arises from surplus-value. The employment of surplus-value as capital, or its reconversion into capital, is called accumulation of capital.
Suffice to say that the accumulation of capital has both a “forward” (future) movement and simultaneously a backward (past) movement. Obviously, if the capitalist invests part of the surplus value, there will be a future process of equivalent exchange and subsequent exploitation and oppression of workers.
However, surplus value is never invested just in workers; a part of what is invested must be invested in machinery, buildings, computers, raw material, supplies and so forth. But the implication of this is that the additional means of production purchased are the result of earlier exploitation of workers. But so too are the additional means of subsistence (consumer goods). The money that workers receive to purchase consumer goods (the wage) is a result of an earlier round of accumulation of capital.
As more and more rounds of accumulation of capital occur, the original investment made by the capitalist becomes a dwindling amount compared to the growing amount of accumulated capital. The equivalent exchange of values characteristic of commodity exchange, when it comes to the accumulation of capital, become inverted so that the equivalent exchange between workers and the capitalist becomes increasingly a merely apparent exchange of equivalents. From the same chapter of Capital (a somewhat long quote, to be sure–it will be the last part of theory):
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. Originally the rights of property seemed to us to be grounded in a man’s own labour. Some such assumption was at least necessary, since only commodity-owners with equal rights confronted each other, and the sole means of appropriating the commodities of others was the alienation of a man’s own commodities, commodities which, however, could only be produced by labour. Now, however, property turns out to be the right, on the part of the capitalist, to appropriate the unpaid labour of others or its product, and the
impossibility, on the part of the worker, of appropriating his own product. The separation of property from labour thus becomes the necessary consequence of a law that apparently originated in their identity.
The power of capital over workers increases as investment in means of production grows–workers face the results of their own labour as a growing alien power confronting them.
To show that the workers’ wages which they receive now is increasingly the result of past accumulation and investment of surplus value, on the one hand, and to show that the means of production that they currently work with is increasingly the result of past accumulation and investment on the other, it would probably be necessary to find statistics for not only surplus value for a particular year but investment over a number of years–a cumulative time series of changes in retained surplus value and their relation to capital stock and wages.
A more precise characterization of the project would have to be devised, but if carried out, it would aim to show that unions’ use of the cliche “fair wages” has little basis in the context of capitalist accumulation since the wages workers receive today are derived from surplus value they produced earlier. It is the existence of a contract, among other things, which hides this fact. Similarly, if fair wages is an ideological expression that hides the exploitation and oppression of workers, then the cliche of a “fair contract” also is an ideological expression that hides the exploitation and oppression of workers.
Such empirical work, therefore, has political relevance. However, such a research project undoubtedly involves a lot of work–and the development of many skills. I am unsure how to proceed, but it would be a politically relevant project.
2. The rate of exploitation of beverage workers could be calculated.
3. The rate of exploitation of food and beverage could then be calculated as a whole.
4. The same applies at the provincial level of Ontario (I requested the input/output tables for 2019 from Statistics Canada, but I also asked them what the most recent input/output tables are. They responded that the most recent tables were for the year 2022–and sent those tables. I have requested again that they send the 2019 input/output tables).
5. Another research project that I have been thinking about is the determination of the distribution of the means of production (specifically capital stock) among industries and the distribution of workers among the various industries.
Anybody want to have a hand in doing any of these? We could try to limit the research project at first to even to just one industry, perhaps, to start with (such as breweries or bakeries and tortilla manufacturing).
