[00:00] (lively orchestral music)
[00:12] - This is where we've come
[00:15] by way of certain mediating doublets.
[00:27] Right, we saw how values
are made by this peculiar,
[00:33] what do you call it?
[00:34] Union of incompatibles
I would like to call it.
[00:43] We saw how
[00:56] concrete labor becomes the bearer
[01:01] 'cause it makes use
values of abstract labor,
[01:04] which has to go through.
[01:07] You'll notice that these,
[01:08] I don't like to call
this dialectics exactly
[01:10] because it isn't exact.
[01:12] Hegel really wanted
dialectics to be exact.
[01:16] The kinds of pairings
[01:19] and the kinds of transformations
[01:20] that happen here are not regular.
[01:23] But nonetheless, this will
help you see a little bit
[01:25] what has happened so far.
[01:28] Forms of value, what are they?
[01:30] Do you remember?
[01:33] The two main ones.
[01:37] The equivalent form
[01:40] and the relative form.
[01:44] They work together in a certain way
[01:46] to make money precipitate out.
[01:48] You can see how the way
the result comes out
[01:50] of this strange doubling process
[01:53] is not the same in every case.
[01:57] Thank you for turning that down.
[02:02] This is not all that happens,
but it's a kind of a skeleton.
[02:05] And then the question is, how
do you get from here to here?
[02:13] And that's what we're talking about today.
[02:19] In the end, we get a formula,
which is something like this.
[02:30] And it also goes...
[02:33] Let's see.
[02:37] It goes in all dimensions at once, right?
[02:42] Not exactly sure how, but there is a...
[02:44] It's probably like
[02:47] this money gets used for
something else altogether.
[02:51] In any case, I would want to
just point out to you again
[02:54] that the use process
[02:57] and the capital process
are the same and different.
[03:04] This is commodity exchange.
[03:08] This is money exchange.
[03:13] This is what Marx will focus on
[03:15] as the signature of capitalism,
[03:18] of the capital system.
[03:20] He calls it the general formula,
[03:21] and it will have a lot of problems.
[03:23] It can't dispense with commodity exchange,
[03:26] especially because what this produces
[03:28] is everything we consume to keep going,
[03:33] but our consumption is now...
[03:35] So this is, you could call
it a consumption formula,
[03:40] and you could call this
a production formula,
[03:44] but it's a production of value.
[03:47] And this is a consumption
[03:49] for the purposes of surviving. (laughs)
[03:55] Surviving becomes the handmaid
[03:59] of the production of value.
[04:03] You survive in order to produce value.
[04:07] This is how, incidentally,
the commodity formula
[04:12] and the money formula are
the same and different
[04:15] at the same time as the economic structure
[04:17] of society is the same and different
[04:20] as the social structure of society.
[04:21] You begin to see that social
things like surviving,
[04:25] what you have to eat, what
you have to live with,
[04:28] and producing value
[04:32] come out of the particular change
[04:34] from one economy to the next,
[04:38] from a commodity economy to
a money or value economy.
[04:46] There's another feature here
that's really important,
[04:49] that a merchant
[04:58] looks at the capital system from here.
[05:01] A merchant, an investor,
and a businessperson,
[05:03] and all the economists that
Marx was arguing against,
[05:07] they look at it from
this particular chain.
[05:10] They don't look at it from here.
[05:12] This is what Marx is adding.
[05:14] These are the operations that go on
[05:17] to turn products
[05:20] into capital.
[05:27] The economist and the
businessperson looks at it
[05:29] from circulation,
[05:34] and they don't see what
Marx calls the difference
[05:37] in content lurking in the form.
[05:40] This form seems the same
until you break it in two,
[05:44] and then it's drastically different.
[05:46] You have different starting
points and different endpoints,
[05:51] and the difference in
content is significant.
[05:53] One concentrates on producing commodities
[05:56] and supporting consumption.
[05:58] The other concentrates on producing money
[06:00] and supporting value production.
[06:08] You need the one for the other,
[06:10] but you don't need the other for the one.
[06:11] This is where socialism would
enter into something more.
[06:15] It wouldn't dispense
with money necessarily.
[06:17] It might not even dispense with value,
[06:19] but it certainly would
dispense with capital.
[06:26] I love this.
[06:28] Humanists don't have so
many blackboards usually.
[06:33] I just want to point out
that there is a simple...
[06:35] Oh, this is not what I want.
[06:37] There is a simpler formula,
commodity to commodity,
[06:42] in which you might have
the mediation of money,
[06:45] but that would be money of account only,
[06:48] where you would say a
banana's worth three tires.
[06:52] Three would be money there,
[06:53] but it just keeps the account of the value
[06:56] so you know how much you need
to give of bananas for tires
[06:59] or tires for bananas.
[07:02] Here,
[07:05] you have money as...
[07:10] Remember the different functions of money?
[07:14] Money as a standard of
value or money of account.
[07:17] So this, if there was money in here,
[07:20] it would just be like, I'd say,
[07:22] "You know, give me 20
bananas for those tires."
[07:25] 20 would be the money of account
or the standard of value.
[07:31] This would be money as
a means of circulation.
[07:33] You need it in there.
[07:34] It would actually
facilitate the handing over
[07:37] because, as you remember,
[07:38] CM is separated in space and time from MC.
[07:44] These are really the same M.
[07:47] Someone gives money for something,
[07:50] and that person would go
and buy another commodity
[07:52] at a different space and time.
[07:54] So without money in that size of economy,
[07:58] you could not do your economy.
[07:59] You couldn't get your bananas.
[08:02] So we're talking very
different sizes of economy,
[08:04] but you can see how
the different functions
[08:06] of money are used in different
kinds of economies, right?
[08:10] Money of account could just be a number.
[08:12] It could be you're counting
these things in dates,
[08:14] but no dates have to change hands.
[08:15] You don't even have to have dates there.
[08:17] You're just like, "Okay,
this is worth 20 dates.
[08:19] That's worth 30 dates.
[08:21] I'll give you, you know,
[08:23] I'll give you 2/3 of my
thing for your other thing."
[08:28] This, money takes on a different function.
[08:31] It's very odd that the same thing
[08:32] can be functionally different,
[08:34] but this is the way Marx is
beginning to see the world.
[08:38] Money still functions
as a money of account
[08:41] or standard of value,
[08:42] but it has to be there in
some sort of form to mediate,
[08:48] to stretch space and time so
that the transaction can occur.
[08:52] There was a question which I missed.
[08:53] Yeah, Tomas.
[08:55] - For the first one we see C?
[08:58] - Yeah.
[09:00] - What sort of economy is that?
[09:01] - I mean, it could be
like a barter economy,
[09:03] but nonetheless you could
still have a standard of value,
[09:06] and normally you would,
[09:08] but because you could trade
the thing for the thing
[09:10] because you were close enough,
[09:12] you'd only need to refer
[09:13] to the standard of value notionally.
[09:17] - On the side notation,
referring to C and C, right?
[09:20] - This is a commodity
economy, which is larger,
[09:23] and you need money to mediate.
[09:25] And there is something like,
[09:26] there's value in a more robust sense.
[09:32] So you notice that in this,
[09:40] in the middle one, money is a mediator.
[09:44] In this, you have a special verb.
[09:46] You say, "I spend money."
[09:49] You spend money to buy,
[09:54] and you gain money when you sell,
[09:58] and the exchange is equal.
[09:59] 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] (electronic signal humming)
[50:01] (electronic device buzzing)
(bright music)