surplus labor value

Discussion in 'Economics & Trade' started by Guno, Jan 3, 2016.

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  1. Guno

    Guno Well-Known Member Past Donor

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    Basic economics

    A capitalist is employing a worker to make a widget. The cost of raw materials and overhead was $10. He sells this widget in the end for $20.00. So with the cost of raw materials we have now got $10 left. So the worker makes the widget all by himself while the boss is away somewhere else. The end of the day comes, the worker has made the widget The boss takes this widget and sells it (and does for $20 as mentioned above). To pay him for his work, he gives him $3. So where did the rest of the money go ? There is $7 unaccounted for. It didn't go the worker. It went to the boss, as profit. The boss has extracted so called surplus value.

    now multiply that by hundreds of workers in the bosses factory

    Without the labor, the raw material would extract nothing for the boss
     
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  2. georgephillip

    georgephillip Well-Known Member Past Donor

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    http://www.marxist.com/in-defence-of-ltv.htm

    "What is value?

    "This question has perplexed the human mind for more than 2,000 years.

    "The classical bourgeois economists grappled with the question, as did Marx.

    "After much deliberation, they correctly concluded that labour was the source of value. This idea then became a cornerstone of bourgeois political economy, beginning with Adam Smith.

    "On this question, there was common ground between Marx and the classical bourgeois economists."

    The idea that all wealth is created by human labor has been seriously questioned over the past three centuries. I'm wondering what labor value means when automation and AI replace half of all currently existing jobs?
     
  3. freakonature

    freakonature Well-Known Member

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    Your over simplification of production reveals your degree of experience or knowledge on the subject. To equally match Your level of understanding, I will state that the"boss" doesn't do his 8 and hit the gate.
     
  4. Ndividual

    Ndividual Well-Known Member

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    Another capitalist builds a machine to make a widget. The cost of raw materials and overhead was $10. He sells this widget in the end for $17.00. So with the cost of raw materials we have now got $7 left. So the machine makes the widget all by itself while the business owner is away somewhere else. The end of the day comes, the machine has made the widget The business owner takes this widget and sells it (and does for $17 as mentioned above). The $7 difference between the costs of the raw materials and overhead is profit. Most labour today is being done by machines, not humans.
     
  5. Taxpayer

    Taxpayer Well-Known Member Past Donor

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    Which is why the boss purchased that labor. Same as why he purchased the cogs, wheels and other parts without which the labor, nuts, bolts and other parts would be less valuable.

    That value isn't surplus. The additional value exists in the configuration of those parts. A clock is more valuable that it's component pieces, because someone brought together the cogs, wheels, labor, nuts and bolts and they become a clock. That someone is the boss.





     
  6. georgephillip

    georgephillip Well-Known Member Past Donor

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    There is a democratic alternative to the authoritarian workplace you describe:

    "A worker cooperative is a cooperative owned and self-managed by its workers.

    "This control may be exercised in a number of ways.

    "A cooperative enterprise may mean a firm where every worker-owner participates in decision-making in a democratic fashion, or it may refer to one in which management is elected by every worker-owner, and it can refer to a situation in which managers are considered, and treated as, workers of the firm.

    "In traditional forms of worker cooperative, all shares are held by the workforce with no outside or consumer owners, and each member has one voting share.

    "In practice, control by worker-owners may be exercised through individual, collective, or majority ownership by the workforce; or the retention of individual, collective, or majority voting rights (exercised on a one-member one-vote basis).[1]

    "A worker cooperative, therefore, has the characteristic that the majority of its workforce own shares, and the majority of shares are owned by the workforce.[2]"
    https://en.wikipedia.org/wiki/Worker_cooperative
     
  7. Taxpayer

    Taxpayer Well-Known Member Past Donor

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    *shrug* Good luck with that.




     
  8. PreteenCommunist

    PreteenCommunist Active Member

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    People are still needed to build and supervise machines, and mechanical labour can still make up value.


    That is why the boss purchased labour, because they rely on labour to create surplus-value. The profit from this surplus value is used by the boss to purchase cogs, wheels, nuts and bolts, among other things. The cogs, wheels, nuts and bolts could not have been purchased or brought together without exploited labour-power.
     
  9. Taxpayer

    Taxpayer Well-Known Member Past Donor

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    [video=youtube;Bnj1sPfo4Ek]https://www.youtube.com/watch?v=Bnj1sPfo4Ek[/video]​
     
  10. saspatz

    saspatz Member Past Donor

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    The bothersome part of this is that the cost of labor has remained stagnant for 30 years while the value of that labor, in terms of productivity has gone way up. Trust me when I say there is a human running that machine and probably several others during their shift.
     
  11. BleedingHeadKen

    BleedingHeadKen Well-Known Member Past Donor

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    Sounds great. I'm all for it. Why aren't there more of these? If they aren't authoritarian, how do they ensure that everyone produces?

    Actually, there's a school version of this example using the "Sudbury Valley" system. Everyone in the school, including the students, has a voice in the operation of the school. Students can vote out faculty, or other students, and curriculum is created by the entire body. It seems to produce good results. I wonder if that sort of thing would fly with the inherently authoritarian Marxists?
     
  12. Taxpayer

    Taxpayer Well-Known Member Past Donor

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    A process, of which one component is human labor, has become more productive over time. You reason that this means the human labor contribution must be responsible for this increase in productivity. And therefore that human component should be more greatly valued and compensated.

    How do you reconcile that reasoning with the the point where the human labor contribution hits zero, and the process still becomes more productive? ​

    [​IMG]

    Maybe the increase in productivity isn't coming from new skills and efforts of the guy asking you if you want fries with that, but is instead coming from how his ever simpler contributions are combined with cash registers, potatoes, schedules, oil and other components in that process. Maybe the increase in productivity is a consequence of the guy who designed, assembled and maintains that process. Fry guy's boss.



     
  13. WillReadmore

    WillReadmore Well-Known Member

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    I think we're interested in maximizing our competitiveness with other nations, raising our standard of living, and allowing the rising tide to raise all boats - rather than ending up with "winners support the losers" style of economy.

    Given that, I think the question becomes what it is that we need to do to achieve that.

    My bet is that there are a number of keys here, ranging from the need to keep US corporations from taking their profits and work offshore, to making education prohibitively expensive, to enabling labor to be paid equitably, etc.

    You mention the move in our economy toward jobs that deal with automation and design. These are businesses that are started by college graduates and which employ college graduates. So, if that's our direction, we're going to be better off if we allow more kids to get that level of education and if we do so equitably, rather than reserving education for the kids of the wealthy by raising financial barriers as we have been.
     
  14. saspatz

    saspatz Member Past Donor

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    We're not talking about "Fry Guy", we're talking about Joe or Jane Labor who runs three machines during their shift producing 500 widgets an hour still getting paid the same as if they were producing 5 per hour before automation. If we fail to pay labor fairly then their are no consumers to buy the widgets and it all goes down fast.
     
  15. georgephillip

    georgephillip Well-Known Member Past Donor

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    "The MONDRAGON Corporation is a corporation and federation of worker cooperatives based in the Basque region of Spain.

    "It was founded in the town of Mondragón in 1956 by graduates of a local technical college.

    "Its first product was paraffin heaters.

    "It is the tenth-largest Spanish company in terms of asset turnover and the leading business group in the Basque Country.

    "At the end of 2014, it employed 74,117 people in 257 companies and organizations in four areas of activity: finance, industry, retail and knowledge."
    https://en.wikipedia.org/wiki/Mondragon_Corporation
    Mondragon began operating with six employees in the mid-1950s, I believe.
     
  16. Taxpayer

    Taxpayer Well-Known Member Past Donor

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    The widgets are coming from a process to which Joe is contributing some labor and Mike is contributing some grain. If Joe is putting in the same labor into a new process, why would he be paid more? If your process started getting more done with less grain, would you pay Mike more — for the same grain?

    And the idea that if you don't give people enough money, they won't be able to buy your product is bad logic. It assumes you are somehow responsible for making their labor productive. Pretty soon there will be no employees. Who is going to be responsible for Joe's productivity when we are all our own boss?




     
  17. saspatz

    saspatz Member Past Donor

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    Why would labor be treated like a commodity? You are comparing apples and oranges.

    My point is that the labor is considerably more productive. Therefore more valuable.

    I await this day and grow old, very very old. If this ever does come to pass then Joe will be his own boss too. Then he will get paid for his labor commensurate with his production.
     
  18. Taxpayer

    Taxpayer Well-Known Member Past Donor

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    How is the labor more productive?

    You won't have to wait too long. The shift from employees to contractors is moving pretty fast in most industries.



     
  19. Ndividual

    Ndividual Well-Known Member

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    The machines are performing most of the labour, reducing the labour of the human employee(s). The increased productivity occurs as a result of the labour being performed by the machine and therefore belongs to the owner of the machine.

    If an individual who makes his living by plowing land with a mule also employs someone to clean the barn where the mule is kept, saves and/or borrows money to purchase a tractor which allows him to plow many more fields each day and earn much more, should his employee who cleans the barn expect a raise proportionate to the increased income being produced by the tractor? O course the employer could sell the mule and eliminate the need to employ someone to clean the barn.
     
  20. Deckel

    Deckel Well-Known Member Past Donor

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    Don't like it, quit. They will find someone else. The value of your labor has less to do with the value of what you make and more to do with the cost of the person that would replace you.
     
  21. Ndividual

    Ndividual Well-Known Member

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    I find it difficult, if not impossible, to find an application of the term "surplus labour" in any workplace today, where little human labour is actually being performed relative to the productivity.
     
  22. Guno

    Guno Well-Known Member Past Donor

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    Really? I am an Industrial Engineer and Manufacturing Engineer, there are very few "lights out manufactures" with total automation, most manufactures depend on labor, yes it has changed as people are working with more technology now , but still labor is used
     
  23. Ndividual

    Ndividual Well-Known Member

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    I did not claim there were ANY manufactures totally automated, did I?

    Really! Read my words again, "I find it difficult, if not impossible, to find an application of the term "surplus labour" in any workplace today, where little human labour is actually being performed relative to the productivity."
     
  24. Ndividual

    Ndividual Well-Known Member

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    The reality is that the cost of labour has been increasing constantly since the end of WWII while the amount of human labour needed relative to the productivity has been decreasing. No one denies that some human labour is needed to keep the machinery running, but the loss of a human in the process has much less effect on productivity than the loss of a machine, and the human is much more easily and quickly replaceable.
     
  25. saspatz

    saspatz Member Past Donor

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    This trend didn't really take off until the advent of automation in the late 70's and early 80's. The question becomes what can or should be done to productively engage the labor force in such a way as to support a functional economy and not end up dropping back into feudalism.
     
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