Necessary & Surplus Labour Time

A key marxist argument against capitalism is that capitalists extract the surplus value from their workers. But what is surplus value? In capitalism, the clear relation between necessary labour time and surplus labour time is often obscured, so to more clearly illustrate it, lets use feudalism as an example.

In early Feudalism, peasants have a ‘contract’ with a landlord that imposes certain obligations to each other. A simple example of one of these obligations is that the feudal lord ‘protects’ the peasants from bandit raids and in exchange the peasants provide rent in the form of labour service or rent in kind (ie; a non monetary tax). So normally, peasants have a small plot of land for themselves but they also have a certain amount of days or a certain percentage of their produce to their lord. The necessary labour time relates principally to the time they spend on their own plot of land, using the tools that they (or their commune) own to produce their own food, other tools and other handicrafts, which they consume themselves. Here they are producing things that are of only use value, or utility, since it is more or less being immediately consumed and is not intended to be sold, and its not being collected as rent. This kind of farming is also known as subsistence farming because there’s usually not surplus until you have a large enough amount of land or until technology and techniques improve, which in turn raise productivity and efficiency. .

The surplus labour time, meanwhile, involves labour that you do but it is not labour for the benefit of yourself. In early feudalism, this would usually be that peasants owed their landlords a certain amount of days working on the landlord’s farm or doing other work for the landlord. This was known in France as the corvee and was a frequent complaint of peasants as seen in the cahiers, until feudalism was formally abolished in France during the Night of Patriotic Delirium on 4th August 1789. Corvee labour was a form of labour that hindered the productive forces In many feudal holdings this corvee labour was eventually replaced with rent-in-kind since peasants had more incentive to work harder if it was their own lands they were working and the lords got just as much, if not more out of it, than a corvee labour system.

How does this work in capitalism? Of course, in capitalism, most people are proletarianized and do not own their own capital in the form of land (for productive enterprises) as they become urbanized, so they have to sell their labour power as a commodity, which  is all they have to sell, and they often end up working in large factory style enterprises. So lets say a worker gets paid $10 a day to produce shirts. Let us also say that the capitalist provides the worker $3 a day worth of materials (factoring in the cost of ‘wear and tear’ and maintenance of machines) to produce shirts. Now let us say this worker is working 10 hours a day and it takes her 2 hours to produce $10 worth of shirts that the capitalist will sell at market for $20. So here the worker has produced in two hours the equivalent value of her daily wage and this daily wage is just enough for the worker to maintain their ability to stay alive to come back to work the next day and nothing else, as is the wish of the capitalist. But now after these two hours, the worker still has another 8 hours of work to go to actually get her $10 daily wage. In the remaining 8 hours, the worker produces another $40 worth of shirts that will each be sold for $20. So the worker has produced a surplus value of $40 and the capitalist will sell this $50 total value of shirts at a market price price of $100 total which means from an initial outlay of $13 a day for one worker, the capitalist stands to make $87. This is what is meant by the extraction of surplus labour or simply exploitation: the wage labourer produces a far greater amount of value, in the form of the exchange value in money form, than the wages they earn at no benefit to themselves.

In the kind of scenario I just outlined, the wage labourer works for $10 a day for 10 hours a day. Now multiply this over a larger scale of workers, and also for far lower pay than in my hypothetical example, and this is the situation much of what we nowadays call the ‘Global South’ or ‘developing world’. In general this same basic relation applies in the vast majority of enterprises and especially large corporations in the modern world, whether they be in the United States or China. In the Soviet Union, with the centrally planned economy under Stalin, there were two ways in which this issue was resolved. The first involves state owned enterprises, in which the majority of the economy was composed of. Examples of nationalised enterprises were typically the largest scale ones, such as steel foundries, automotive and tractor manufacturers, weapons manufacturers, film studios and so on. In any modern economy,including socialist ones, that is characterised by high productivity and dominated by large scale enterprises, there is always going to be a surplus value, or profit, that comes out of the workers’ efforts.

Since these kinds of enterprises are typically massive, giving everyone an equal or otherwise fair share of the profits on top of their wages is not an effective solution for their produced surplus value. So instead of the surplus value going into the hands of individual private capitalists or absentee shareholders, the profit goes into the commons, also known as public services, which ensures free healthcare, education, utilities, very cheap or no rent, childcare and so on that every citizen is entitled to, in addition to the general maintenance of government administration. Many modern countries do have these kinds of public services to some degree, but these are usually financed through varying levels of taxation and from the Marxist-Leninist point of view, this is not as good as the Soviet model since people’s surplus value is still extracted by the capitalist and then they are being taxed on top of this. The second way is through co-operative worker enterprises, in which all those that actually did the work in an enterprise are the ones who receive any profit, rather than private capitalists or absentee shareholders who do none of the work.

These co-operatives were the second largest form of enterprise in the USSR and usually comprised enterprises that required smaller amounts of staff than, say, a steel mill. These would be things like collective farms (kolkhoz), restaurants, some printing houses, etc. There was still room for individual private business, such as being a locksmith, cobbler, or small artisanal work, since these don’t involve exploiting the labour of others.