Q.Examine Marx's concept of surplus value.
Ans. Ans. Karl Marx, the father of scientific socialism, has contributed another concept to the socialist thought, which is the concept or the theory of surplus value. His theory of surplus value is considered as one of his most important contributions. Marx has based this theory of surplus value on Ricardo's theory of value, also known as labour theory of value. According to Ricardo the value of commodity is determined by the labour spent on it. C.L. Wayper writes, "Marx's famous theory of surplus value is an extension of Ricardo's theory, according to which the value of every commodity is proportional to the quantity of labour contained in it, provided this l labour is in accordance with the existing standard of efficiency and production. Labour power equals the brains, muscle, and nerve of the labourer. Being itself a commodity, it must command a pricele proportional to the number of labour hours entered into its production. This will be the number of the labour hours required to house and feed the labour and to bring up his family. This is the value of his services, for which he receives corresponding wages. But labour is unique among commodities because in being used up, it creates more value. The employer, therefore, once he has acquired the labourer's stock of potential services, can make him work more hours than would be required to produce that stock. The value thus created over and above what the labourer is paid for, Marx calls surplus value, and he regards it as the source of all profit."
What is Surplus Value ? According to Marx labour is the sole creater of value. He defines value as "Crystalised labour" and defines commodity as the 'congelation of labour. Marx holds the view that the value of a commodity is equal to the value of labour necessary for its production. Out of the four agents of production land, labour, capital and organisation, only labour is variable. The other factors of production are constant or sterile. These three can re-produce only when labour is put in. In other words, these elements of production can play their part in the process of production only what labour is put in them. Their value does not change during the course of production. As said earlier, labour alone is variable. It is capable of reproducing a surplus over and above its equivalent Marx further says that value is thus produced by labour, but the labourers do not get the entire value created by them. They are only paid a small fraction of the value created by them in the form of wages. The rest goes to the capitalist. In other words the value which the labourer gets for his services is much less than the value produced. There is a difference between the value paid for labour power and the value created by labour, which is in fact received by the capitalist. This difference, according to Mane, is surplus value. The value created over and above what the labourer gets, is appropriated by the capitalist himself, which is simple exploitation. This difference, which Marx calls conceded labour or un-paid labour is precisely the share which falls to the capitalists. This is sheer exploitation of the labour by the r capitalist. The rate of surplus value indicates the degree of exploitation of labour by the capitalist. The "essence of capitalist's exploitation is the production of surplus value. The capitalists are not interested in the production of consumer goods or in the creation of means of production. They are interested in the extraction of as much surplus
value as possible."
In the prevailing structure of society, labour stands to lose. The instruments of production like machines, toots, and materials upon which labour can be performed, are owned by the capitalist. The labour possesses only his ability and capacity to work. The labour, which a labourer has to sell, is highly perishable. Therefore he is obliged to accept whatever is offered to him for the simple reason that one day's labour withheld is labour lost Therefore he sells labour power for whatever wage is given to him. The capitalist knows the helplessness of the worker and thus takes advantages of the perishable nature of labour, by offering the labourers less than their due, the capitalists earn more profits. To maximise his profits, the capitalist must pay less to the workers. It is all due to the surplus value created by labour that the process of exploitation of the working class starts. Marx declared, "For exploitation, vieled by religious and political illusions, it (bourgeoisie) has substituted naked, shameless, direct, and brutal explanation."
The appropriation of surplus value by the capitalist is fundamental injustice of the modern industrial system, an injustice which all forms of socialism seek to remove. The capitalist industrial system is in fact, different only in form from a slave society. The slaves worked and created surplus value under compulsion. The modern worker creates surplus value under a free contract into which he voluntarily enters. But in as much as the worker is unprovided with the means of production, he has in fact, no alternative but to sell the commodity (services) he possess namely-his labour. The capitalist, who after paying him a bare subsistence wage, pockets the proceeds.
Surplus Value and Capitalism: Marx further points out that in the capitalist society the capitalist himself also falls a victim to the system, because he is compelled to expect as much surplus value he can lay hands upon. Increased improvements in the technology of production make possible an increasingly large scale production. Writing about this victimisation of the capitalist himself at hands of system, Prof. Harmon writes, "In order to take advantage of his opportunities, the capitalist requires larger and larger amounts of capital The tendency in capitalism is towards bigger and fewer units of production and a consequent concentration of control and the tendency is inevitable because fewer units with advanced techniques of production are capable of producing a much greater supply of commodities. The result is an enlargement of the proletariat and a decrease in the size of the capitalist class." The capitalists try to secure more and more surplus value and in the process exploit the proletariat more and more. This tendency leads it towards its self-destruction, the final act of which is to accomplished by the proletariate through a revolution.
Criticism of theory of Surplus Value: Marx's theory of surplus value stands is subjected to criticism from several quarters. The main lines of attack are as under:
1. Labour alone not the creator of value: The critics, particularly the economists, are of the view that labour power alone does not create value, which is fetched by a commodity. The capitalist has to pay wages to the workers, has to pay for machinery and pay rent for the building and also pay interest on the money which he might have borrowed Besides, he has to pay for the raw-material and has also to provide for the depreciation charges. Marx does not make any allowance for the role played and value created by the other three agents of production like, land, capital and entrepreneurship. It can be said, rightly too, that production is a co operative process in which labour is just one of the partners. Hence Marx's view that labour power alone creates value is a one-sided view and ignores the reality.
2. No allowance for over-head charges : The critics further point out that Marx has made no allowance for the over-head charges which are incurred by the employer in the forms of many taxes which he pays, a major part of which is used by the slate to provide social services to the community.
3. Theory of surplus value as theory of price is rubbish: Some critics arc of the view that the theory of surplus value is open to criticism from the point of view of economic theory. As a theory of price, it is rubbish and invalid, for if surplus value is created by the consumption of labour power and industry in which capital is invested in labour would be more profitable than one in which capital is invested in machinery.
4. No risks for labour: Marx ignores the fact that the capitalist class puts his money to risk, when it invests capital in business, which, if not returned, will lead to great loss. On the other hand the labourer has no such risks involved.
5. Cole's criticism: Prof. Cole has also criticised the Marsian theory of Surplus Value. According to him, his theory of value is "to a great extent a polemic which continues to thrive as a result of persistent misunderstanding of it by Marx's own disciples." Again the Marxian theory of value remains untouched by the criticism which has been revelled against its fundamental validity.
6. Poper's criticism: Poper points out that the Marxian theory of value is wrong for it we asume, as is fundamental to Marx's case, a free market in which there is always a greater supply of labour than there is demand for it, the law of surplus and demand becomes sufficient to explain all the phenomena of increasing misery, without bringing value in it.
7. Misleading nature of the theory: Some critics are of the view that the Marxian labour theory of value, on which his concept of surplus value is based, is misleading, for it is mainly intersted in what a labour ought to get in reward of his labour; it things of the value of man's labour or of the commodity produced by his labour in terms of worth.
