Class 5: Capital Chapters 2-4: Exchange, Money, Capital, part 2

1:25

what has happened so far.

1:28

Forms of value, what are they?

1:30

Do you remember?

1:33

The two main ones.

1:37

The equivalent form

1:40

and the relative form.

1:44

They work together in a certain way

1:46

to make money precipitate out.

1:48

You can see how the way the result comes out

1:50

of this strange doubling process

1:53

is not the same in every case.

1:57

Thank you for turning that down.

2:02

This is not all that happens, but it's a kind of a skeleton.

2:05

And then the question is, how do you get from here to here?

2:13

And that's what we're talking about today.

2:19

In the end, we get a formula, which is something like this.

2:30

And it also goes...

2:33

Let's see.

2:37

It goes in all dimensions at once, right?

2:42

Not exactly sure how, but there is a...

2:44

It's probably like

2:47

this money gets used for something else altogether.

2:51

In any case, I would want to just point out to you again

2:54

that the use process

2:57

and the capital process are the same and different.

3:04

This is commodity exchange.

3:08

This is money exchange.

3:13

This is what Marx will focus on

3:15

as the signature of capitalism,

3:18

of the capital system.

3:20

He calls it the general formula,

3:21

and it will have a lot of problems.

3:23

It can't dispense with commodity exchange,

3:26

especially because what this produces

3:28

is everything we consume to keep going,

3:33

but our consumption is now...

3:35

So this is, you could call it a consumption formula,

3:40

and you could call this a production formula,

3:44

but it's a production of value.

3:47

And this is a consumption

3:49

for the purposes of surviving. (laughs)

3:55

Surviving becomes the handmaid

3:59

of the production of value.

4:03

You survive in order to produce value.

4:07

This is how, incidentally, the commodity formula

4:12

and the money formula are the same and different

4:15

at the same time as the economic structure

4:17

of society is the same and different

4:20

as the social structure of society.

4:21

You begin to see that social things like surviving,

4:25

what you have to eat, what you have to live with,

4:28

and producing value

4:32

come out of the particular change

4:34

from one economy to the next,

4:38

from a commodity economy to a money or value economy.

4:46

There's another feature here that's really important,

4:49

that a merchant

4:58

looks at the capital system from here.

5:01

A merchant, an investor, and a businessperson,

5:03

and all the economists that Marx was arguing against,

5:07

they look at it from this particular chain.

5:10

They don't look at it from here.

5:12

This is what Marx is adding.

5:14

These are the operations that go on

5:17

to turn products

5:20

into capital.

5:27

The economist and the businessperson looks at it

5:29

from circulation,

5:34

and they don't see what Marx calls the difference

5:37

in content lurking in the form.

5:40

This form seems the same until you break it in two,

5:44

and then it's drastically different.

5:46

You have different starting points and different endpoints,

5:51

and the difference in content is significant.

5:53

One concentrates on producing commodities

5:56

and supporting consumption.

5:58

The other concentrates on producing money

6:00

and supporting value production.

6:08

You need the one for the other,

6:10

but you don't need the other for the one.

6:11

This is where socialism would enter into something more.

6:15

It wouldn't dispense with money necessarily.

6:17

It might not even dispense with value,

6:19

but it certainly would dispense with capital.

6:26

I love this.

6:28

Humanists don't have so many blackboards usually.

6:33

I just want to point out that there is a simple...

6:35

Oh, this is not what I want.

6:37

There is a simpler formula, commodity to commodity,

6:42

in which you might have the mediation of money,

6:45

but that would be money of account only,

6:48

where you would say a banana's worth three tires.

6:52

Three would be money there,

6:53

but it just keeps the account of the value

6:56

so you know how much you need to give of bananas for tires

6:59

or tires for bananas.

7:02

Here,

7:05

you have money as...

7:10

Remember the different functions of money?

7:14

Money as a standard of value or money of account.

7:17

So this, if there was money in here,

7:20

it would just be like, I'd say,

7:22

"You know, give me 20 bananas for those tires."

7:25

20 would be the money of account or the standard of value.

7:31

This would be money as a means of circulation.

7:33

You need it in there.

7:34

It would actually facilitate the handing over

7:37

because, as you remember,

7:38

CM is separated in space and time from MC.

7:44

These are really the same M.

7:47

Someone gives money for something,

7:50

and that person would go and buy another commodity

7:52

at a different space and time.

7:54

So without money in that size of economy,

7:58

you could not do your economy.

7:59

You couldn't get your bananas.

8:02

So we're talking very different sizes of economy,

8:04

but you can see how the different functions

8:06

of money are used in different kinds of economies, right?

8:10

Money of account could just be a number.

8:12

It could be you're counting these things in dates,

8:14

but no dates have to change hands.

8:15

You don't even have to have dates there.

8:17

You're just like, "Okay, this is worth 20 dates.

8:19

That's worth 30 dates.

8:21

I'll give you, you know,

8:23

I'll give you 2/3 of my thing for your other thing."

8:28

This, money takes on a different function.

8:31

It's very odd that the same thing

8:32

can be functionally different,

8:34

but this is the way Marx is beginning to see the world.

8:38

Money still functions as a money of account

8:41

or standard of value,

8:42

but it has to be there in some sort of form to mediate,

8:48

to stretch space and time so that the transaction can occur.

8:52

There was a question which I missed.

8:53

Yeah, Tomas.

8:55

- For the first one we see C?

8:58

- Yeah.

9:00

- What sort of economy is that?

9:01

- I mean, it could be like a barter economy,

9:03

but nonetheless you could still have a standard of value,

9:06

and normally you would,

9:08

but because you could trade the thing for the thing

9:10

because you were close enough,

9:12

you'd only need to refer

9:13

to the standard of value notionally.

9:17

- On the side notation, referring to C and C, right?

9:20

- This is a commodity economy, which is larger,

9:23

and you need money to mediate.

9:25

And there is something like,

9:26

there's value in a more robust sense.

9:32

So you notice that in this,

9:40

in the middle one, money is a mediator.

9:44

In this, you have a special verb.

9:46

You say, "I spend money."

9:49

You spend money to buy,

9:54

and you gain money when you sell,

9:58

and the exchange is equal.

9:59

You end up with the same value on either side.

10:04

Does that make sense?

10:05

It starts with production and ends with consumption.

10:08

And it's only about use values,

10:10

although use values are mediated by value.

10:17

And as we said last time,

10:18

the same piece of money changes place twice,

10:19

and it moves in an eccentric fashion

10:22

away from the original owner of the money.

10:27

The disposition of each buyer, as I said last time,

10:30

is, "I don't need my money.

10:31

I want a banana.

10:33

Take it.

10:34

Do what you want with it."

10:40

In this, the commodity is the mediator for money.

10:44

It's a vehicle to bring the money back to you,

10:47

and money returns in a reflux.

10:52

The commodity is a mediator,

10:54

and money, as Marx said, is the alpha

10:56

and omega of this religion.

10:57

It begins, it creates, and it redeems.

11:03

In this, money is not spent.

11:04

It is advanced.

11:06

This is what capitalists call it.

11:10

I don't think I've ever advanced money.

11:11

That's why I guess I'm in the situation I'm in,

11:15

unless you count advancing it to my teenager. (laughs)

11:17

There's no reflux there except his joy and health,

11:22

and, right, that's okay.

11:24

In this case, the same commodity changes place twice,

11:27

but the money comes back,

11:30

and this makes circulation

11:32

into a circuit that has to be completed.

11:35

It's not commodities flying off

11:36

into people's mouths or backyards.

11:39

It is money returning to the account

11:43

of the original advancer.

11:47

But the problem, as Marx says,

11:49

is that the buyer ends up with the same...

11:51

I mean, the capitalist ends up

11:54

with the same thing that they started with.

11:56

Give money away, you get a commodity.

12:00

You sell that commodity, you get the money back

12:02

because everything trades at its value.

12:05

This, he says, is absurd,

12:07

and yet all of the people

12:09

who only see the circulation system,

12:11

who see that as the source of value,

12:14

imagine that out of the same, you can get more.

12:18

This is the fantasy, pernicious fantasy,

12:22

of the traders,

12:25

the business owners,

12:27

and the economists who take their perspective

12:30

or their standpoint

12:33

because the general formula, as you know,

12:38

like "The Wizard of Oz,"

12:42

is MCM prime,

12:44

or MC delta M, delta meaning change.

12:48

There has to be a change in the advance.

12:50

Otherwise, why would you do it?

12:52

Because the use value of money is to bring more money,

12:54

just like the use value of a seed is to bring a carrot.

12:58

If your stuff doesn't grow...

13:01

My one foray into gardening,

13:03

I tilled this giant garden when I was in college,

13:05

planted the whole thing,

13:06

and one sprout of tomatoes came up in the compost heap.

13:11

So, I was a very bad gardener/capitalist.

13:17

A supplement has to enter the picture somewhere,

13:21

and Marx wants to argue that this supplement

13:24

cannot possibly enter in circulation

13:27

no matter how high you sell your stuff

13:29

because as we said last time,

13:32

and we'll say over and over,

13:34

all overages and all underages are passed on.

13:38

Someone will make it up out of somewhere

13:40

because the economy in these terms is a zero-sum game.

13:45

If I buy dear,

13:48

then I have to get something else cheaper

13:49

'cause I only have a limited amount.

13:51

If someone gets something for more,

13:53

they can pay more for something,

13:55

and someone's gonna raise the price.

13:57

Supply and demand equal out over time.

14:00

You cannot get what Marx will now call surplus value

14:05

out of the circulation sphere.

14:07

The sphere of circulation doesn't make more of anything.

14:10

It just passes around the same.

14:12

You must have it, but it's not the productive source.

14:17

It's the location of the realization of value.

14:21

But the productive source has to be elsewhere.

14:22

We don't know yet where it is.

14:24

It could be in your dreams, in your fantasies.

14:32

Those people who live in a commodity society,

14:35

which is all of us, we all live in a commodity society,

14:39

we say, "Well, you can't eat money."

14:44

And those people who live in a value society,

14:46

which we all do,

14:48

it's just layered on top of the commodity society,

14:51

you say, "We can't eat our commodities."

14:54

You see the difference?

14:56

The people who are out for value want

14:58

to preserve their commodities

14:59

to make value before they're eaten.

15:01

If you eat what you produce, you're not a capitalist.

15:06

So he needs a new form change.

15:08

He needs a kind of form change

15:10

that brings more from the same

15:12

or finds a new source.

15:17

Under capital, all of these processes transform

15:21

to be headed towards M prime,

15:23

headed towards this more or this plus,

15:25

the plus of value.

15:29

Now if we ask what capital means,

15:31

we go back to the definition of one very good economist,

15:34

Kit Sims Taylor.

15:36

Capital is value held over time.

15:40

We start to think, "Well, there's something missing

15:42

from that."

15:43

I've held a lot of things over time,

15:45

and they tend to lose their value.

15:48

If capital is what brings more or the more that comes,

15:52

it can't simply be that.

15:56

What you need is a commodity,

15:58

a special commodity that brings more than it costs

16:04

because of its special qualities.

16:08

A couple of stipulations.

16:09

When you get to studying the capital system in these terms,

16:13

you can no longer say profit until the very end.

16:16

We're not concerned with the genesis of profit.

16:18

The terms that Marx uses are capital and surplus value.

16:22

Capital is made up of surplus value.

16:24

Profit is mystified.

16:26

It doesn't tell you anything about where it comes from.

16:29

It doesn't even tell you that it's a surplus.

16:32

This is huge.

16:34

In a zero-sum system, where does the surplus come from?

16:37

We know one place it comes from, nature,

16:40

which is thought of in capitalism as a bottomless abundance.

16:45

We know how this is not true in many ways.

16:50

And in fact, all surplus will come from nature.

16:52

It's just it also comes from the nature of human beings.

16:56

That is their capacity to labor.

17:00

Okay.

17:02

Capital is not just value held through time.

17:06

It is value that is in movement here,

17:10

but it's not just in movement through space and time.

17:13

It does have to circulate to get realized.

17:17

It's in movement within itself.

17:19

It transforms within itself in an increasing way.

17:23

It valorizes itself.

17:27

We go from a production process here

17:30

in which you produce a commodity.

17:32

You use money to get it somewhere,

17:33

and someone consumes it.

17:35

This would be,

17:36

the production of commodities would start this out

17:39

to a system in which you are producing value

17:44

that has to come back with more,

17:48

and Marx calls that valorization.

17:51

So every time you see valorization,

17:53

it's where something is getting what it didn't have before.

17:57

And Marx

18:00

holds to Occam's razor,

18:03

or holds to Spinoza and Leibniz.

18:07

He believes everything has to have a sufficient reason.

18:12

If you have more, it has to come from somewhere.

18:15

Nothing comes from nothing.

18:18

You can argue with this, but Marx doesn't.

18:20

That's his instrument to show that the economists are silly

18:26

or blind or...

18:28

And you will notice how many of them he quotes

18:30

in the footnotes and in the body like,

18:32

"Condillac and others who say,

18:34

'Yes, the one who sells something gets more back,

18:37

and the one who buys something gets more back.'"

18:39

And Marx was like, "Huh, that's interesting." (laughs)

18:42

A lot of fantasies among the people

18:45

who are thinking about the economy because it's a mystery.

18:48

It was the biggest mystery, and Marx solved it,

18:52

and he solved it by giving names

18:53

to the parts that nobody had thought of,

18:55

one of which is surplus value.

18:56

Now we have to ask where it comes from,

18:58

which is in our reading this week,

19:02

but I want to make sure you understand this stuff

19:04

before we go on.

19:05

Questions while I sip my cold brew?

19:11

You notice that the capitalist fuels

19:12

are getting stronger and stronger? (chuckles)

19:18

This all clear?

19:21

- Does cold brew valorize?

19:23

- Cold brew of course valorizes, yeah,

19:25

by the poor guys who are pulling shots all day.

19:29

- Is it monetized?

19:30

- (laughs) No, I'm not invested, if that's what you mean.

19:34

I always think it would be good to invest in something,

19:37

and I think, "How does one do that?"

19:40

- Will you say more about (speaks faintly) topic?

19:45

- Sure.

19:47

I will say also that I taught this book.

19:49

In prison, one of the guys asked me if when they got out,

19:53

they use it to start a business.

19:56

You might learn how to invest.

19:58

I mean, it is real economics,

20:00

so you might learn how to invest here, but I resist.

20:06

Why not profit?

20:10

Because profit seems to be the thing

20:12

that comes from trade.

20:16

That's what it means.

20:17

It seems to emerge

20:18

at the moment where you're selling something.

20:22

Profit is what you get back.

20:24

Surplus value is what goes in.

20:28

So if you're asking where's this extra coming from

20:32

in a ontologically sufficient universe,

20:36

then it has to come from somewhere,

20:39

and profit denies that.

20:41

Profit is the most mystified concept.

20:44

Wait, there was a question up here.

20:47

- Right, so my question is about value in society.

20:51

When you're buying a commodity with money,

20:54

and then you exchange the commodity,

20:56

you know, and you leave it there,

20:57

are you using the commodity as a store of value?

21:01

- Yeah.

21:02

- And so M prime is a newer value?

21:05

- Uh-huh, it comes from somewhere,

21:07

extra value. - Right, okay.

21:08

- Yep.

21:09

Yep, commodities store value too.

21:10

If these things didn't hold value and preserve value...

21:13

Now we're gonna see in the labor process

21:15

how preserving the value

21:17

of the semi-products that come in

21:20

and also of your means of production,

21:22

your tools and your equipment,

21:24

is one of the chief jobs of the capitalist

21:28

to ensure by/through two methods,

21:32

discipline, called supervising,

21:36

and propaganda,

21:40

Marx calls real subsumption.

21:43

You preserve your stuff at work much more carefully

21:47

and with much less effort on the part of the owner

21:49

when you love your work.

21:53

- So you say value and mainly while, I guess,

21:56

still talking like simple society.

21:57

You say this added value, this valorization,

22:00

can't come from circulation.

22:02

- Oh, well, Marx says that.

22:08

- But if we bring something from a market in which,

22:10

say, if we bring a commodity from a market, right,

22:12

in which it's very easy to produce

22:13

to a place where it's much harder to produce,

22:17

then doesn't value simply come from that circulation?

22:21

Or are we saying that, like, transporting the commodity...

22:23

Say we bring bananas from a very sunny place to a very cold.

22:26

- You mean, imagine that, let's say,

22:29

a shirt is made much more cheaply in Bangladesh?

22:32

Just imagine (student speaks faintly)

22:35

it's made more cheaply in Bangladesh than here.

22:37

Yeah, it just means that the market switches

22:39

to get all the fashion from Bangladesh,

22:40

so you're not really comparing anything there.

22:44

- But we're getting this delta M

22:46

from moving something, right?

22:50

Like, you bought it- - Well, yeah, I mean, it's...

22:52

Well, you're getting the shirt from there,

22:54

but you're no longer comparing it

22:56

to shirts made in the US, for example,

22:58

except as a luxury good.

23:01

So there's no added value to getting it from there.

23:03

It's just that when you go

23:05

to a place where labor is much cheaper

23:07

or technology is much more efficient,

23:11

then the cost of production goes down.

23:15

Sorry, Richard and then Tomas.

23:17

- I'm trying to think about the relationship

23:19

between production and consumption here

23:21

because it's all in one circuit, basically,

23:24

in throughout the society.

23:26

So does circulation conceal production?

23:30

- Yes, circulation conceals production

23:33

and consumption, actually.

23:35

In this circuit,

23:38

the question is about production and consumption.

23:40

In this circuit, Marx says consumption happens

23:44

outside of circulation.

23:46

This is for private consumption.

23:50

I can't load this anymore, can I?

23:52

Ah.

23:54

It's big, the economy.

23:55

You noticed?

23:57

Private consumption

24:03

here.

24:05

In this, there's a kind of consumption, as you'll notice,

24:08

that he calls productive consumption,

24:12

which money uses to make a commodity

24:16

to make more money,

24:18

and that is raw materials and means of production.

24:24

Those are consumed in the production process.

24:26

So there's two types of consumption.

24:30

It is true that circulation,

24:31

at least historically for the economists,

24:36

has concealed the abode of production

24:38

or the place of production,

24:39

and that's where we're going today.

24:41

Marx makes it very dramatic in this version of the book.

24:44

In other versions of the book, it's much drier.

24:46

But he wanted this to captivate you.

24:49

So he says, "We will now move

24:50

into the hidden place of production."

24:53

Production is hidden historically

24:55

because economists have just thought

24:57

that magically the more comes out of there.

25:00

But it's also the case

25:03

that circulation is very public,

25:07

and production is hidden even by capitalists.

25:10

It's locked behind doors.

25:11

It's hidden for all sorts of reasons.

25:13

So there's a factual material concealment

25:17

that goes on as well.

25:19

What of course is hidden

25:20

because we didn't have the analytic tools to see it

25:23

is the capital process in its real operations.

25:28

Nobody had seen that before, not Ricardo, not Smith,

25:32

certainly not Hegel,

25:36

according to Marx.

25:39

One more question, yeah.

25:41

Tomas. - To the previous question,

25:43

on value-

25:44

- Yeah. - We'd need the (indistinct)

25:45

and the dash.

25:46

So when the conditions of productions of,

25:49

we have a car that won't (indistinct) change,

25:52

which is what today in like, yeah,

25:54

"Financial Times" is called adding value, right,

25:59

that's no longer the same commodity.

26:01

What happens is that the commodity changes entirely anew,

26:04

so that's all you can compare,

26:06

yeah, right, wouldn't you say?

26:07

- No, it's because the conditions of production.

26:10

Once you start making cheap Xs in Mexico,

26:16

it doesn't matter where it is,

26:17

but it does obviously for the lives of the people there

26:20

and international relations.

26:22

But wherever it is that you're making a thing cheaper

26:25

because labor is cheaper

26:26

or because there's better technology,

26:31

then everything switches to that source.

26:34

So,

26:37

it may be that it's cheaper for the people to buy it,

26:41

for us to buy it here in a core economy.

26:44

But, I mean, it's just like any other value production,

26:47

just happened to move there,

26:49

and the factors of production have changed.

26:53

It doesn't change the way value is made at all.

26:57

- It's also, like, one market.

27:00

There aren't different markets,

27:01

so it's just the socially necessary labor time.

27:04

- Yeah, exactly, socially...

27:06

So I'm trying to call it SNAALT

27:08

with a kind of Swedish accent,

27:10

socially necessary average abstract labor time,

27:14

(laughs) SNAALT.

27:17

So hold on to that one, but that's right.

27:19

It's just that the parameters of SNAALT have changed,

27:24

but anyone who wants to get a shirt

27:27

has to compete with Bangladesh.

27:34

Okay.

27:37

We know that the main contradiction,

27:39

what he calls a contradiction in the general formula,

27:41

is that in the general formula,

27:47

you have to somehow get more out of the same.

27:51

That's the contradiction.

27:57

We're looking at chapter four.

28:00

If you take a look at the last four or five pages,

28:02

they're very important.

28:09

They start to tell you some of

28:14

the real inputs here.

28:20

Buying and selling labor power is an important section.

28:23

This will be the special commodity

28:26

that allows more to be added

28:30

to the money that you circulate.

28:32

That means, actually, that the more comes in here.

28:38

It's the only place it can come in.

28:40

It doesn't come in in consumption.

28:41

How am I adding more to it when I consume something?

28:44

In fact, I'm using it up.

28:46

The value will be gone by the time I'm done,

28:48

or slowly over the use of a hammer,

28:52

I will waste the value of that hammer.

28:55

It doesn't come in in circulation

28:57

'cause that's just the exchange of equal values.

28:59

There's no way I'm gonna give you my car,

29:02

old and crappy as it is, for your banana.

29:04

Sorry, you'll have to give me a few bushels

29:08

of bananas, at least.

29:12

The only place Marx says it can happen is in production,

29:17

and particularly in one aspect of production,

29:21

in the buying and selling of labor power.

29:24

This is the only place the change of value can happen

29:26

because of the schizoid nature of labor.

29:31

Labor's double.

29:36

This is really what makes capital the difference

29:39

between labor power and labor.

29:43

This you will have noticed from your reading,

29:48

that like any commodity,

29:53

the capacity to use the commodity

29:56

and the using of commodity are different things.

29:58

One is kind of stored in it,

30:01

and the other is used up when you consume it.

30:04

In fact, labor power is consumed when you're laboring.

30:08

Does that make sense?

30:11

There's no question that labor is a commodity

30:14

in a market economy, right?

30:17

It's a natural endowment.

30:18

It's an enhanced endowment through skill-building

30:22

and education and all of those things.

30:24

It's a natural cultural/societal endowment

30:27

that can be stretched and built, and waxes and wanes.

30:31

But nonetheless,

30:33

what makes this all go round is that it's traded.

30:39

In fact, if you think of an economy,

30:41

if I couldn't trade my labor power,

30:43

if I couldn't use my labor power for trade,

30:45

I wouldn't get anything back

30:47

so that I could go to the supermarket, right?

30:52

I must.

30:53

My labor power has to become a commodity

30:55

in a large exchange economy.

30:57

Otherwise, I wouldn't have that thing I need to

31:00

unless I started out with a huge amount of capital.

31:03

But if I came into this world with nearly nothing, as I did,

31:07

I have only my labor power to sell.

31:13

And on the other side, commodity sales,

31:18

capitalism requires someone with labor power

31:21

to sell so that they can have money

31:23

to buy the commodities that I'm making.

31:25

Marx uses the example of the company store.

31:27

You go to work.

31:28

You make a, what, a shoe.

31:30

And then of course to shoe your family,

31:32

you need to go to your boss

31:34

and buy the shoes at full price,

31:36

even though you can make them.

31:38

These are the ironies of the capital system.

31:40

So if I didn't have labor power to sell, right,

31:43

my being able to shoe my family,

31:45

though I have the skills to make the shoes,

31:47

is now mediated by labor power.

31:52

I have this thing.

31:53

I promise them I'm gonna give them X amount of my time.

32:00

Does that make sense?

32:09

The split that makes this not an economy

32:14

for the laborer, but a schizonomy,

32:17

if you want to be Deleuzian about it or something like that,

32:20

what makes it for me as a worker a schizonomy

32:23

is that I sell my labor power, but the owner gets my labor.

32:28

What's the difference between labor and labor power?

32:31

Labor power is what I promise as my capacity to do things,

32:33

but labor is as much as they can get out of me

32:36

in the time I've contracted to work, actual labor.

32:43

My labor power is valued at its cost of reproduction,

32:47

just like any commodity.

32:48

What does it cost to produce my labor power?

32:51

What are the factors in my labor power?

32:53

Can you shout them out?

32:56

Strength, it's a cost, but what builds strength?

33:01

Food, sleep.

33:03

So, a house, all of those things, right?

33:06

This is called my

33:12

means of subsistence.

33:13

There's a lot of little monograms.

33:16

My means of subsistence.

33:17

So labor power is sold

33:22

from my means of subsistence.

33:24

But you see what the issue is here.

33:26

The capitalist has to pay my means of subsistence

33:30

and their means of subsistence out of my labor power.

33:36

They have to pay for next year's contingencies

33:39

out of my labor power.

33:41

They have to hedge their bets against weather and thieves

33:45

and the up and downs of the markets

33:47

all out of my labor power.

33:49

So that better be pretty elastic

33:51

because it's not just gonna be...

33:53

They're not just gonna be getting out of it

33:55

what they pay me.

34:02

A laborer lives a schizonomy

34:04

in which their labor power is what is sold

34:06

and that what they get is the cost to reproduce themselves.

34:10

What they give, however, is the cost

34:12

to reproduce the business,

34:16

which might include a higher standard of living

34:18

for the owner, but doesn't necessarily have to.

34:21

The whole business depends on the value put in

34:24

through actual labor.

34:27

The value of labor power is determined

34:28

by my wants and needs.

34:32

It's worth saying that this is not a natural determination,

34:36

but a historical determination.

34:37

So if my wants and needs include an iPhone,

34:43

what else, an umbrella,

34:46

what do we need that are historical,

34:49

socially determined rather than naturally determined?

34:52

Huh?

34:53

Tuition for your children, amen.

34:57

That's right, the things I've done for tuition,

35:00

future tuition for my children.

35:02

Yep, depends on the society you live in.

35:04

If you live in Argentina, where my partner is from,

35:06

you don't save for tuition because the universities are?

35:09

- Free.

35:10

- You pay taxes, but the state has decided it wants

35:13

to allow you to go to these extremely dilapidated buildings

35:19

without a charge, right?

35:21

So this list of wants

35:23

and needs are not just, like, biological.

35:27

I don't want you to think that any of this is natural.

35:29

It's socially determined,

35:30

and it might very well include a car,

35:35

a state government,

35:38

diapers for your kids

35:39

rather than running around pooping all over the place.

35:41

Yeah.

35:42

- So labor power is based at the (indistinct),

35:46

but it's in the (indistinct) sense, right?

35:48

- Yeah.

35:49

- And goods are priced as their SNAALT.

35:54

- Yes.

35:56

- How do we...

35:59

There's gotta be a difference between

36:01

like how we're pricing labor times

36:04

and how we're pricing means,

36:05

and how we're valuing labor power.

36:07

- That's right.

36:09

Yeah, you have to...

36:10

Well, one of the main controls

36:13

when we get to talking about

36:17

relative surplus value later,

36:19

you'll see that one of the main controls

36:21

that a capitalist has to increase their surplus value

36:24

is to diminish the cost of those goods

36:29

that maintain the means of subsistence.

36:33

So it doesn't help the capitalist

36:35

to drive down prices anywhere,

36:37

but it does help them to drive down the price of rice

36:41

because that means they can reproduce

36:42

the worker more cheaply.

36:44

So there's a lot of pressures on the agricultural sector

36:47

and other kind of infrastructure sectors

36:49

for individual consumption to go down and down and down.

36:52

Technologies in those parts of the economy

36:55

actually help profits rise or surplus value increase.

37:00

Richard.

37:02

- Talking about labor power,

37:04

and she says it's like all the capacities

37:06

that exist in a person.

37:07

But like, as one notices, like, an office worker,

37:11

which is like typing on Excel, saying something,

37:16

you know, (speaks faintly),

37:18

like, how are they, like, valued typically

37:21

if they're valued differently?

37:23

- No, they're always valued at the cost

37:24

to reproduce the worker regardless of what it is.

37:27

This is an another averaging force.

37:33

Right, all labor is the same.

37:35

That's why the proletariat is ultimately uniform

37:37

because they only get...

37:40

Their wages get driven down...

37:42

Wait till you see the mystification of the wage form.

37:46

Their wages get driven down

37:48

to the minimum of their historical means of subsistence

37:51

when at all possible.

37:54

Workers' groups can fight against that and can raise it,

37:57

but it gets taken out in other places, as he will show.

38:01

The capital system eats its limits, including unions.

38:04

So what do you do?

38:06

Form a union?

38:08

Shorten the day?

38:10

You can do that, but as he shows in the 19th century,

38:13

this increased the pressure to raise productivity

38:17

to such a degree that people were just dying

38:19

in a shorter time.

38:22

We don't have to be cynical about it,

38:24

but it is worth showing, understanding how capital,

38:27

the capital system, eats its limits.

38:28

Or if you try to make a reasonable capital system,

38:32

it always backfires.

38:34

This is Marx's view.

38:36

There is no way to make a better capital system.

38:39

It can be better temporarily.

38:41

It can be better for certain groups.

38:43

But it will always recoup

38:45

in one way or the other the misery

38:47

that it imposes on people.

38:50

This is Marx's position.

38:51

It's a structural analytic position.

38:53

It's not a moral position by any means,

38:57

and this is a very strong challenge to current economics

39:00

and liberalism that is worth thinking through,

39:04

whether you end up agreeing with it or not.

39:06

It is relentlessly and resolutely negative,

39:11

the effects of capital.

39:13

Though it feeds the world,

39:14

it drives the majority of people

39:17

into an immiserated circumstance

39:20

such that their lives are kind of keeping pace

39:23

with their own misery.

39:27

AJ.

39:32

Sure, you can for a short time,

39:34

but as Marx says in one of these chapters,

39:36

the quality of their work suffers, (laughs) right?

39:40

You can give them less than they need to eat,

39:41

but they're gonna wear out faster.

39:43

You can see that humans are now a form

39:46

of capital that are invested in,

39:49

and we end today's session talking about

39:54

constant and variable capital.

39:56

What used to be called workers

39:57

are now called variable capital,

39:59

variable because you can get more

40:02

and less surplus value out of them

40:05

depending how you turn the dials.

40:09

Okay, a few more things.

40:11

We only have 10 minutes left.

40:15

We go to chapter five,

40:17

the labor process and the valorization process.

40:22

But do reread if you have a chance the last pages

40:25

of chapter four.

40:33

One irony that comes up in the last pages

40:35

of chapter four, which I love,

40:36

is that in addition to being exploited,

40:40

that is, paid less than the value they actually create,

40:43

the workers have to loan their labor to the employer

40:47

and get paid at the end of the week.

40:49

Isn't that astounding?

40:51

The workers, not only are they exploited,

40:54

but they're the capitalist's first creditor,

40:58

and they have no choice but to lend them to work.

41:01

I always found it astounding.

41:02

Why do I have to wait till the end of the month to get paid?

41:06

Well, because they're extorting the work from you.

41:11

Did I tell you the four Xs?

41:14

Extortion, expropriation, extraction, exploitation.

41:18

This is the relentless negativity

41:20

that this book is giving you, the four Xs.

41:23

Those are the modes by which capital depletes everything.

41:33

Okay.

41:36

We're going into the sphere of production now,

41:39

but we're going in, first of all,

41:42

from the standpoint of the capitalist.

41:44

This is what production looks like

41:46

for the capitalists from their standpoint.

41:49

I'm giving you a lot of formulas today,

41:51

but let's do this one last one.

42:03

This is what it looks like.

42:10

This is where value is created.

42:27

You start with money that's advanced from the capitalist

42:31

to get a commodity that's a raw material.

42:36

It goes into production.

42:39

It gets worked by labor and becomes commodity prime,

42:43

that is, you get a lump of iron,

42:44

and it comes out cast-iron pot, right?

42:49

And that cast-iron pot goes out

42:51

and brings more than the money you invested

42:54

in the means of production, which is

43:00

raw materials and the means of labor,

43:04

tools and equipment and objects,

43:13

and the labor power you've bought.

43:17

You've bought labor power.

43:18

You've bought means of production.

43:20

It goes into production,

43:21

and you get out something more than you got in, right?

43:23

That's what we understand work to be.

43:24

You've worked something,

43:26

and the thing is different, more,

43:27

better suited to something than it was before.

43:30

It's more developed like the lump,

43:33

like iron ore becomes an iron rod.

43:37

You just snap your fingers.

43:39

An iron rod becomes a cast-iron pot (snaps) like that.

43:42

You just snap your fingers.

43:43

No, there's this labor that happens in the meantime.

43:46

So he's adding this in here

43:48

and showing you what hides behind circulation

43:51

is actually the hidden place of production

43:55

in which these factors of production depend

43:58

on this difference in order to produce the more,

44:04

the difference between labor power

44:06

and the actual labor that comes out.

44:10

Okay, before we get to surplus value,

44:12

which I think we'll get to next time,

44:17

and remember, just we're doing

44:18

this weird formula dance today.

44:29

This is what a laborer sees,

44:32

sees their labor power exchanged for money,

44:35

which they use to buy a commodity,

44:37

which is their means of subsistence.

44:41

So this is the standpoint of labor

44:44

and the standpoint of capital,

44:48

if they knew it,

44:50

which they don't, unless they read Marx,

44:55

which they don't.

45:00

Okay, before we go, I want to just say a few things

45:02

about what labor is for Marx, where it comes from,

45:06

how it differs from Ricardo and Smith.

45:09

I'm gonna leave this up here 'cause it looks so good.

45:12

I realize spending a life reading texts like poems

45:15

with people, you don't put anything on the board, really.

45:19

It's not as impressive.

45:23

Okay, what is labor?

45:32

Labor is according to Marx...

45:35

What is labor?

45:36

Do you have a good definition?

45:40

Seminar moment.

45:46

Labor work?

45:50

AJ?

45:51

- The thing done to transform a thing.

45:53

- Thing done to transform one thing to another.

45:55

So if I take a hat,

45:57

and I pull a rabbit out of it, that's labor?

46:00

Well, maybe.

46:02

Could be.

46:03

Yeah. - So maybe add to that

46:05

it's an ability,

46:06

so it's a capacity to make change

46:10

or work on something.

46:12

- It is true Marx is Aristotelian in this way.

46:15

He thinks things go from capacities to actualities.

46:19

So, labor, if you can do it,

46:21

there was a capacity that preceded it.

46:22

This is not the only way to think about things.

46:24

Hazal.

46:25

- There has to be an idea behind it,

46:26

so it's not like the land engages in it.

46:29

- Okay, so nature does not do labor.

46:31

Nature transforms.

46:33

But as he says, quoting Aristotle,

46:37

labor, human labor, has an idea

46:41

and leads that idea as part of the capacity into actuality.

46:44

That's true.

46:46

Yeah.

46:47

- Is it like energy?

46:49

- Labor, that would be a physical definition of it,

46:51

that it's energy that does work

46:54

or effort that produces a product, yeah.

46:59

I'm gonna do another formula.

47:01

This is good.

47:02

Ooh, I can pull this down?

47:05

Is that true?

47:07

Yeah, look at that. (object whirring)

47:08

Ah.

47:11

Labor has a very particular intentional structure.

47:16

It's gonna sound insane.

47:20

- Wow.

47:26

- How's that?

47:28

This is the intentional structure of labor.

47:31

A worker works a workable into a worked.

47:35

It has a temporal structure too.

47:40

This is the subjective element,

47:41

what he calls the subjective element.

47:45

This is the objective element.

47:48

And this is a process.

47:54

These two belong to nature.

47:59

The process of work belongs to human nature

48:04

according to Marx.

48:05

I'm not sure I agree with this,

48:07

but it certainly has a non-natural element,

48:10

which is that the way of working changes socially.

48:17

But fundamentally, working is a natural,

48:20

as is the workable object,

48:23

comes from nature.

48:25

And the process here he likens to

48:31

another natural.

48:33

He likens to it, it's a little different,

48:36

where at least, in work in socialism

48:39

or pre-capitalist formations,

48:42

work is like a metabolism.

48:43

It takes a workable, and it digests it

48:47

and spits it out as a worked,

48:50

or as as a work, if you want to put it that way.

48:52

Yeah.

48:53

- Do capitalists do labor or do work?

48:56

- No.

48:57

Nope, capitalists never work,

49:00

not because they're sitting around either.

49:03

Capitalists are,

49:05

what do you call them?

49:07

What do they call them here? Stewards.

49:09

It's a terrible institutional name.

49:11

They're stewards of work

49:12

or overseers of work, organizers of work,

49:14

but always other people's work.

49:16

So work is not equivalent to effort.

49:19

You make a lot of efforts that are not work.

49:22

Richard. - So it's not really labor.

49:25

It's laboring.

49:27

- Yeah, laboring.

49:29

It's a process.

49:33

This changes somewhat.

49:35

This is the basis for labor under capitalism,

49:39

but it changes somewhat,

49:40

and we'll talk about that next time

49:43

when we get into surplus value,

49:44

the different modes of capital.

49:46

Just warning you that for next week,

49:48

we're talking about the working-day chapter,

49:49

which is about 100 pages.

49:51

It's not theoretical exactly.

49:54

It's historical,

49:55

but might want to get started on your reading.

49:59

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50:01

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