Rate of Surplus Value
잉여가치율
The ratio of surplus value (s) to variable capital (v), the wages laid out on buying labour-power (s/v). Because it equals the ratio of surplus labour, worked for the capitalist without payment, to necessary labour, in which workers produce the equivalent of their wages, Marx called it the exact expression of the degree of exploitation of labour-power by capital, and it is also called the rate of exploitation. It differs from the rate of profit, which divides surplus value by the whole capital advanced, including the constant capital laid out on means of production.
In depth
How is the degree of exploitation measured?
How much a capitalist has made is usually measured by the rate of profit: lay out 1 million won and have 200,000 won left over, and the rate is 20%. Marx held that this figure hides how far the workers have been exploited. The surplus comes from labour-power, not from machines or materials, so to see the degree of exploitation surplus value must be compared with the money laid out on labour-power, variable capital.
In chapter 7 of Capital, volume I, Marx gave his own example. A capitalist advances £500, laying out £410 on means of production (constant capital c) and £90 on labour-power (variable capital v). When production is over the product is worth 410 + 90 + 90 = £590, and the surplus value (m) is £90. Dividing 90 by 500 in the usual way gives 18%. But Marx wrote: "In fact, however, the rate of surplus value is not m/C or m/(c + m) but m/v, thus not 90/500 but 90/90 = 100%, more than five times the apparent degree of exploitation."
In der Tat aber ist die Rate des Mehrwerts nicht = m/C oder m/c + m, sondern = m/v, also nicht 90/500, sondern 90/90 =100%, mehr als das Fünffache des scheinbaren Exploitationsgrads.
Why leave constant capital out of the reckoning?
The value of the means of production simply reappears in the product. The value newly created in the process, in Marx's words the "value product", is therefore not £590 but v + m, £180. However large or small the constant capital, the size of this new value and of the surplus value within it does not change; Marx showed this with the thought experiment of setting constant capital at zero and leaving surplus value as it was. To see how much surplus value has arisen, therefore, constant capital must be left out and surplus value compared with variable capital alone.
Das im Prozeß wirklich neu erzeugte Wertprodukt ist also verschieden von dem aus dem Prozeß erhaltnen Produktenwert, daher nicht, wie es auf den ersten Blick scheint, c + v + m oder 410 Pfd.St. + 90 Pfd.St. + 90, sondern v + m oder 90 Pfd.St. + 90 Pfd.St., nicht 590 Pfd.St., sondern 180 Pfd.St.
What appears when it is put in terms of labour time?
The working day falls into two parts. The part in which the worker reproduces the value of his labour-power, the equivalent of his wage, Marx called necessary labour time: necessary for the worker, independently of the social form of his labour, and necessary for capital and its world, since the continued existence of the worker is their basis. The part beyond it, in which the worker works for the capitalist, is surplus labour time. Since the value of labour-power determines necessary labour and surplus value is determined by surplus labour, "surplus value stands to variable capital as surplus labour to necessary labour".
Der Mehrwert verhält sich zum variablen Kapital, wie die Mehrarbeit zur notwendigen, oder die Rate des Mehrwerts m/v = (Mehrarbeit)/(Notwendige Arbeit).
If, for example, a worker on an 8-hour day produces the value of his wage in the first 2 hours (an assumption), the other 6 hours are surplus labour and the rate of surplus value is 6/2 = 300%. If the same worker needs 4 hours to produce his wage, the rate is 4/4 = 100%. Marx said the one ratio expresses the relation in the form of objectified labour and the other in the form of living, flowing labour, and concluded: "The rate of surplus value is therefore the exact expression of the degree of exploitation of labour-power by capital, or of the worker by the capitalist."
Die Rate des Mehrwerts ist daher der exakte Ausdruck für den Exploitationsgrad der Arbeitskraft durch das Kapital oder des Arbeiters durch den Kapitalisten.
What was it in an actual factory?
In the second edition of Capital Marx calculated the rate of surplus value in an actual spinning mill from figures for April 1871 supplied by a Manchester manufacturer. In this mill of 10,000 mule spindles, constant capital (raw cotton, wear and tear of machinery, and auxiliary materials such as coal and oil) came to £378 a week and wages to £52. Ten thousand pounds of yarn sold for £510, so surplus value was 510 - 430 = £80. The rate of surplus value was 80/52, about 154%. On an average 10-hour day, this means about 4 hours of necessary labour and about 6 hours of surplus labour.
Der Arbeitslohn beträgt 52 Pfd.St. per Woche. … 10.000 Pfd. = 510 Pfd.St., der Mehrwert also 510 - 430 = 80 Pfd.St.
How does the rate differ from the mass?
The rate of surplus value expresses the degree of exploitation but not its absolute magnitude. Marx explained this in a note to the second edition: with 5 hours of necessary labour and 5 of surplus labour the degree of exploitation is 100% and its magnitude 5 hours; with 6 and 6 the degree is still 100% but the magnitude has grown by 20%, from 5 to 6 hours. The total surplus value a capitalist obtains is the rate multiplied by the number of workers employed, so at the same rate a capital employing more workers obtains more surplus value.
Obgleich exakter Ausdruck für den Exploitationsgrad der Arbeitskraft, ist die Rate des Mehrwerts kein Ausdruck für die absolute Größe der Exploitation.
How can the rate of surplus value be raised?
In chapter 14 of volume I Marx set out the two roads. If labour-power is paid at its value, then with the productivity and normal intensity of labour given, the rate of surplus value can be raised only by lengthening the working day absolutely: absolute surplus value. With the length of the working day given, the relative sizes of necessary and surplus labour must change, which, so long as wages do not fall below the value of labour-power, presupposes a change in the productivity or intensity of labour. Cheaper means of subsistence lower the value of labour-power and shorten necessary labour time: relative surplus value.
Die Produktivkraft der Arbeit und ihren Normalgrad von Intensität gegeben, ist die Rate des Mehrwerts nur erhöhbar durch absolute Verlängrung des Arbeitstags
In a factory where 4 of the 8 hours are necessary labour (an assumption), lengthening the day to 10 hours raises surplus labour from 4 to 6 hours and the rate from 100% to 150%. Keeping the 8-hour day while higher productivity cuts necessary labour to 3 hours gives 5 hours of surplus labour and a rate of about 167%. It is in this second case that real wages can rise while the rate of surplus value rises too.
How does it relate to the wage share?
Mainstream economics discusses distribution not through the rate of surplus value but through the share of wages in national income, the labour share. In Marx's notation the wage share is variable capital's share of newly created value, v/(v + s). If the rate of surplus value is e, the wage share is 1/(1 + e): a rate of 100% corresponds to a wage share of 50%, 300% to 25%. But Marx considered this way of presenting things wrong, because it suggests a division of income earned "jointly" by "labour" and "capital".
What are the issues?
The same ratio can measure the degree of exploitation of a Roman slave or a medieval serf, since under corvée and slavery too the working day is divided into a part for oneself and a part for another. For Marx, m/v is the specific historical form in which the degree of exploitation of labour appears under capitalism.
Some read Marx as holding that the rate of surplus value and the rate of exploitation are not necessarily identical, because surplus value produced and surplus value realised through sale can diverge. Workers may work very hard in a firm that still makes a loss, or prices may soar in a seller's market and yield profits out of proportion to the labour input. Calculating the rate from book profits and wages can therefore overstate or understate the real degree of exploitation, a point that has also figured in trade-union wage bargaining. The same problem underlies the large differences in empirical estimates of the rate of surplus value from national accounts, depending on how productive and unproductive labour are separated.