The January issue of Socialist Voice had an article by me entitled “The wage system and the capitalist illusion.” A worker being told they are getting their equivalent wage relating to their work is being held captive by an illusion that in reality leads to a non-equivalent exchange, which is what the capitalist pays to the worker in the form of wages and what they keep as profits: the surplus value.
The capitalist pays the worker a wage out of their profits, categorised as an expense; yet it is the worker who generates the total value for the owner in the first place. It’s at the expense of the worker that the capitalist accumulates profits and wealth.
It’s like a baker baking a cake in an oven that they don’t own. The proceeds go to the owner, who then decides what size slice is given back to the baker. What they give to the baker is only a portion of what the baker actually created.
This shows in simple terms the fact that wealth is created by labour, but the product belongs to the capitalist; and through the laws, customs and standards of the capitalist private-ownership system this wealth is appropriated and then divided. The relative strength of labour will determine what portion of the wealth they created they are able to keep.
If someone is making a profit, then someone else is not getting their equivalent or fair share for the work they have done. As is in the case of the baker, the cake being the total value, the capitalist creates special categories for appropriating and distributing the total value of the item produced: the cake. It is they who get to make the accountancy decisions, cutting up the cake. Both have contributed, but only one has put their labour to work to create the finished product, and only one gets to direct the distribution of its total value.
The baker receives a slice for all the work they did, knowing full well that they created the cake but equally knowing that without the means of baking there wouldn’t be a cake. The baker is rarely if ever given enough pay to be able to purchase their own oven and materials, for if they did, the owner would become redundant; and so the baker remains dependent on the owner for their means of subsistence.
We must remember that all the baker needs is access to an oven and the materials for creating the cake. Who owns them has no bearing on the actual production process, only on the distribution of the total value of the product after the process is complete.
You hear the argument that the owner pays for all the means and objects of labour—the kitchen, the oven, the utensils, the ingredients, etc.—so the product should belong to them. However, the owner is only able to purchase these, and therefore to maintain the worker’s dependence on them, because of the very fact that their exchange of labour to wages is non-equivalent, an exploitation of the worker in the first place.
It is the exploitation that has already taken place that allows the owner to purchase the materials and objects of production that are used, in the present and the future!
In reality, all workers require is access to the means of production to create the products that fulfil the needs, wants and desires of citizens. All subsidiary acts related to the product, such as managing, distribution, marketing, etc., stem from the work done in the actual production process. If every worker had access to their means of production, production would take place, because needs are a must. Who controls, owns, directs and distributes those means and objects of labour can vary. In other words, there is no innate need or natural law for private-ownership structures, only a desire by those who want to maintain their privileges, who will utilise any and all resources to maintain that privilege.
We are told that the entrepreneur takes the means of production—land, labour, and capital—and through innovative design and development sets about creating jobs, creating an enterprise. We are told that the level of wealth held by those who own the majority share of private enterprise receive it through hard work and dedication. They say that they have “earned” it. These people are so good at their “work” that, according to the Oxfam Wealth Report, “it takes just four days for a CEO from one of the top five global fashion brands to earn what a Bangladeshi garment worker will earn in her lifetime.” It wouldn’t be lost on any of these CEOs that in an exchange of equivalents this would be impossible.
All things being equal, we make exchanges that we consider to be fair. You go to work and you earn a wage or income, and with that you set about your expenditure, which is related to the level of income. This in turn influences decisions on where you live, what you eat, where you shop, what car you drive or how you commute, where you holiday, what you purchase, etc. You consider this to be a fair exchange and may never question the system that exists.
However, as already discussed, something entirely different takes place within the exchange between a worker and their boss that has a real effect on these decisions. It defines the level of wealth not only between citizens but also between countries. The uneven distribution of wealth is reliant on it.
In mainstream economics it is explained that the employer makes marginal decisions on a variety of things—what price to sell at, what quantities to produce, whether to hire another worker, the level of wages and benefits paid out, the duration of the contract, etc.—which ultimately are ways of controlling the return of maximum profit. However, the idea of profit maximisation is not natural: it isn’t there from time immemorial; it is an idea of the capitalist ruling class, just like private ownership, whose interest it is to see profits increase.
It is the ideas of the ruling class that penetrate every household, that are ingrained in our education system, our culture and our values that would have a majority of citizens support or tolerate, on the local and the national level, the idea of privileged wealth.
When you hear that a CEO or senior executive “earns” millions or even billions, a simple form of reasoning should tear down that particular argument. You can quickly realise that their earnings do not equate to the work that they have done but to other sources of income, such as dividends, interest, rent, or illegal means.
This is not earned through work but through the privilege of ownership, and it is this that defines the class relationship, as all value is manifested in the product but is transferred to the owner. If they are employed their salaries will of course be extravagant; but becoming a billionaire does not depend on the level of skill or talent you possess and put to work but on the level of shares you own—i.e. your relationship to the ownership of the means of production. To be a hard worker doesn’t necessarily pay; evidently being a capitalist in a capitalist system does.
What is it about maximising profit that is so appealing and a “must” for the owners and beneficiaries of production? In practical terms, there are human relationships involved in every production process, between the workers, the management, and the owners. The boss explains to the worker that the business is run on margins, and so in order for the business to be viable they offer a certain wage package, which the worker can agree to. These margins are immaterial, fictional lines built into the capitalist mode of operations, like the lines on a road: they create a structure that workers abide by. The marginal decisions dictate to the worker the share of wealth that is kept by labour and that which is taken by capital.
The marginal decisions are what cause machines and automation to replace workers; the marginal decisions decide whether to move from one continent to another. It is also the marginal decisions that promote discrimination, harassment, abuse and the exploitation of workers in many industries and especially in low-wage, low-regulation countries.
However, all these marginal decisions, which are at the discretion of the owners, are based not on the welfare of the work force or society in general but on accumulating capital and maximising profit. Marginal decisions become systematic imperatives to remain part of the capitalist class.
For the capitalist, if you do not grow you die; so in order to survive you must maximise profit, while at the same time impoverishing billions of people. According to Oxfam’s Wealth Report, “eighty two per cent of the wealth generated last year went to the richest one per cent of the global population, while the 3.7 billion people who make up the poorest half of the world saw no increase in their wealth.”
Clearly wealth is being generated, but it is not being distributed. It seems evident that this system is outdated, redundant, and fit for the rubbish heap of history; for we must no longer be complicit in its inequalities, wars, and suicidal destruction of the planet and the human race.
What maintains the system is the idea that private ownership of the means of production and distribution is the best way to meet the needs, wants and desires of society. The imperialist powers of the United States, European Union and Britain finance, train and support the right-wing nationalist, extremist, racist and fascist forces, both overtly and covertly, right around the globe, in every continent.
The most advanced sections of the working class are targeted, their world view reviled and attacked, and leaders murdered by the ruling class and their paid lackeys. It is they who seek permanent war and domination.
We can no longer wait for an “inevitable,” we must directly and politically engage in the class war by agitating, organising and educating our class. Campaigns are essential, but without building an organisation that will politically and ideologically challenge the power of capital our complicity in our own exploitation, the gross exploitation of other nations and the decay of our planet, will continue.
It is this privilege of the ruling class, enshrined in law and maintained by the state apparatus, that ensures that the owners’ infinite drive towards profit remains clear, even if rights, justice, democracy, sovereignty and the environment all become, like labour, another expense.
Let them not fool you. We are not an expense, to be squeezed at any given moment. We are the total value, the sum of all the productive processes. It is we who should be giving those who are not involved in the productive process the subsistence level of wages!
The value system needs to be inverted, where the majority of wealth goes to the mass of workers who produce the goods for consumption, rather than the other way round. If that were the case, poverty would be 99 per cent eradicated. It would be easy for us then to take that minority, the 1 per cent, and send them on job training schemes, where they can take a variety of courses to ease them back into society!
Finally, to shatter the illusion means to be conscious of the fact that we can change and dismantle the rights, laws, institutions and foreign policies that protect the privileges of the capitalist class and their means of accumulating wealth. We can replace them with institutions of our own that are in our interest, along with all people and all nations with whom we exchange equivalents, to ensure the survival of the planet and all living species.
I think giving the last word to Marx on this subject is appropriate, as it is his work that has inspired and led the era of socialist revolution. That era is still with us, albeit at a low ebb, so we must hasten the task of bringing the era to an end—the end of the capitalist barbarous system—by joining in the ranks of the organised class-conscious workers’ movement.
Marx wrote in A Contribution to the Critique of Political Economy: “In the social production of their existence, men inevitably enter into definite relations, which are independent of their will, namely relations of production appropriate to a given stage in the development of their material forces of production. The totality of these relations of production constitutes the economic structure of society, the real foundation, on which arises a legal and political superstructure, and to which correspond definite forms of consciousness. The mode of production of material life conditions the general process of social, political, and intellectual life.
“It is not the consciousness of men that determines their existence, but their social existence that determines their consciousness. At a certain stage of development, the material productive forces of society come into conflict with the existing relations of production or—this merely expresses the same thing in legal terms—with the property relations within the framework of which they have operated hitherto. From forms of development, of the productive forces, these relations turn into their fetters.
“Then begins an era of social revolution. The changes in the economic foundation lead, sooner or later, to the transformation of the whole, immense, superstructure.”