extra surplus-value, by selling at or close to the social average while producing at a rate of productivity far higher than the social average. This gap is crucial and yields a form of relative surplus-value to the individual capitalist. In this case, it does not matter whether the capitalist is producing wage goods or luxuries. But how does this capitalist sell the extra ten widgets per hour at the old social-average price? Here the laws of supply and demand come into play. And the answer is, probably, that they cannot be sold at the old price. So prices begin to decline. As prices decline, the other capitalists are faced with less profit. This amounts to a redistribution of surplus-value from those with inferior technologies to those with superior technologies. Those working with an inferior technology, therefore, have an increasing competitive incentive to adopt the new technology. Once all capitalists in this line of production follow suit and adopt the new technology to produce twenty widgets an hour, so the socially necessary labor-time congealed in widgets declines.
This form of relative surplus-value, which accrues to the individual capitalist, only lasts as long as he or she has a superior technology in relationship to everybody else. It is ephemeral.
This extra surplus-value vanishes as soon as the new method of production is generalized, for then the difference between the individual value of the cheapened commodity and its social value vanishes. The law of the determination of value by labour time makes itself felt to the individual capitalist who applies the new method of production by compelling him to sell his goods under their social value; this same law, acting as a coercive law of competition, forces his competitors to adopt the new method. (436)
So the first form of relative surplus-value considered in this chapter is a class phenomenon. It accrues to the whole capitalist class, and it is as permanent as conditions of class struggle over the value of labor-power allow. The second form is individual and ephemeral. It is this second form, the one that confers individual advantage, that individual capitalists are forced to pursue via the coercive laws of competition. The result is that all capitalists at some point or other are forced to adopt the same technology. The two forms of relative surplus-value are not unrelated, since ephemeral innovations in the wage-goods sector will also drive down the value of labor-power at a physically fixed standard of living. “Capital therefore has an immanent drive, and a constant tendency, towards increasing the productivity of labour, in order to cheapen commodities, and, by cheapening commodities, to cheapen the worker himself” (436–7).
But if you are a savvy capitalist, you will know that you can always get this second ephemeral form of relative surplus-value, provided you always have a superior technology. This generates some interesting results. Suppose the new technology is a new machine. Marx has argued that machines, since they are dead labor, can’t produce value. But what happens when you get extra relative surplus-value because of your new machine? While machines are not a source of value, they can be a source of relative surplus-value to the individual capitalist! Once these machines become general, they can then appear to be a source of the relative surplus-value to the whole capitalist class because of declines in the value of labor-power. This produces a peculiar result: machines cannot be a source of value, but they can be a source of surplus-value.
From the way Marx has set up the argument, we see that there is a tremendous incentive for leapfrogging technological innovations among individual capitalists. I get ahead of the pack, I have a superior, more efficient production system than you, I get the ephemeral surplus-value for three years, and you then catch up with me or even go beyond me and get the ephemeral surplus-value for three years. Individual capitalists are all hunting ephemeral surplus-value through new technologies. Hence the technological dynamism of capitalism.
Now, most other theories of technological change treat it as some sort of deus ex machina, some exogenous variable outside the system, attributable to the inherent genius of entrepreneurs or simply to the immanent capacity of human beings for innovation. But Marx is typically reluctant to attribute something as crucial as this to some external power. What he does here is find a simple way to explain why capitalism is so incredibly technologically dynamic from the inside (endogenously, as we like to say). He also explains why capitalists hold the fetishistic view that machines are a source of value, and why all of us are also subject to the same fetish conception. But Marx is resolute. Machines are a source of relative surplus-value but not of value. Since capitalists are interested in the mass of surplus-value, and since they would generally prefer to gain relative surplus-value rather than confront class struggles over absolute surplus-value, then the fetish belief in a “technological fix” as an answer to their ambitions is all too understandable. We even have a hard time disabusing ourselves of it.
But there is another interesting inference to be drawn that Marx refrains from examining, though he does lightly allude to it elsewhere. Suppose workers live on bread alone, and the cost of bread is cut in half because of increases in productivity. Suppose that capitalists cut wages by a quarter. They gain the collective form of relative surplus-value, thus increasing the general rate of exploitation. But at the same time, the workers can buy more bread and raise their physical standard of living. The general question this poses is, how are gains from increasing productivity shared between the classes? One possible result, which Marx unfortunately neglects to emphasize, is that the physical standard of living of workers can rise, as measured by the material goods (use-values) they can afford, at the same time as the rate of exploitation, s/v, increases. This is an important point, because one of the criticisms frequently heard about Marx is that he believes in a rising rate of exploitation. How can that be, ask the critics? Workers (at least in the advanced capitalist countries) now have cars and all these consumer goods, so obviously the rate of exploitation cannot be increasing! Are not the workers so much better off? One part of the answer is that it is perfectly feasible, in the terms postulated in Marx’s theory, for steady increases to occur in the standard of living of labor at the same time as the rate of exploitation either increases or remains constant. (The other part might be to point to the benefits that accrue to one portion of the global working class as a return on imperialist practices of exploitation of the other portion, but that cannot be appealed to here.)
I say it was unfortunate that Marx did not emphasize this point in part because it would have easily forestalled an erroneous, spurious line of theoretical and historical criticism. But it would have also made us focus more clearly on the question of how benefits from gains in productivity get shared as a crucial aspect of the history of class struggle. In the case of the United States, some share of the gains from higher productivity went to the workers from the Civil War period onward. A typical union bargaining strategy is to agree to collaborate with increasing productivity in return for higher wages. If the benefits from technological dynamism are spread around, then opposition to that technological dynamism becomes muted even as capitalists are cheerfully raising the rate of exploitation. Political opposition to capitalism in general also may become less strident, even if the rate of exploitation is increasing, because workers are at least gaining a higher physical standard of living. The odd thing about the United States is that it is only in the past thirty years or so that workers have failed to gain from rising productivity. The capitalist class has appropriated almost all the benefits. This lies at the core of what the neoliberal counterrevolution has been about and what distinguishes it from the Keynesian welfare-state period, when gains from productivity tended to be shared more evenly between capital and labor. The result has been, as is well documented, a tremendous increase in levels of social inequality in all those countries that have moved down neoliberal lines. In part this has to do with the balance of class forces and the dynamics of class struggle in different places, while in the United States, cheaper imports (and imperialist practices) have also helped workers maintain an illusion that perhaps they may be benefiting from capitalist imperialism. But all this lies way beyond what Marx’s text is proposing. I find it helpful, however, to extend his key insights in these directions.
CHAPTER 13: CO-OPERATION
The three chapters that follow deal with the various ways in which capitalists can procure relative surplus-value of the individual sort. The overall focus is on whatever it is that raises the productivity of labor, and it is clear that this
