Selections from Economic Notes Written 1992-1995, edited Oct

Selections from Economic Notes Written 1992-1995, edited Oct., Nov., 1997 as a Basis for Further Discussion and Publication.(Edited March 9, 1998) (September 27,1998,October 4, 1998,Wednesday, October 14, 1998 ) DRAFT ONLY

INTRODUCTION

In this work I attempt to analyze the workings of the capitalist economy and the source of wealth arising in it. I am concerned essentially with its basic structure and functioning and thus the treatment is at best limited. In the doing of this work I found out that it was impossible to give meaning to the concept of (economic) wealth as an economic entity since the production of wealth is a human activity and therefore its creation depends upon the freedom and choices that people in a society have. These ideas are touched upon necessarily but only briefly.

An economic system, by definition, is one in which the most basic social and personal relationships among its peoples are based upon and derive from its production and distribution of goods. Goods are produced or created in the transformation by effort on natural substances; i.e., substances as they occur in nature into objects for people, objects that are, in one fashion or another, useful to people.
Commodities are goods that are freely consumable to the people of the society; commodities are then said to have use-value. That which is useful does not necessarily mean that it has use-value since it may not be freely consumable. Thus, a gun which is used in the robbery of people or to kill in jealousy is useful, but is not consumable. On the other hand, certain additives to food are consumable, but are not freely consumable.
A good that is not a commodity is waste; waste has no use-value, even though it might be useful, and therefore no value. Thus, prisons are useful and are even necessary in our society, but they have no use-value and therefore are not a commodity; therefore, they are waste. All goods are either commodities or waste.
Effort, when transforming a natural substance into a commodity, is called labor. The amount of average socially useful labor, that is the time, required for the production of a commodity, is called the value of the commodity. Commodities are of two kinds: one kind consists of those commodities that are directly consumable; the other kind are commodities that are used to produce commodities of the first kind. Examples of the first kind are food, clothing, shelter, entertainment, drugs; they are what are called consumer goods. Examples of the second kind are machinery, factories, tools used in the making of consumer goods; they are what are called capital goods. Thus, commodities are those goods that eventually end up being consumed, by going into the replenishment of people so that they may continue living at the standard of living at which they have been living. This does not mean that a commodity is necessarily healthful- in fact, it may harmful. However, as long as the good is freely excchanged, that is, freely bought and has use-value it is a commodity and thus is consumed in maintaining the standard of living.
Thus, in commodity exchange there is a use-value for the buyer in the commodity he is buying but not in the commodity that he is selling. At the same time, there is an equality or identity in the values of the two commodities being exchanged. That is, by equal values is meant equal times of laboring in the production of commodities, either identical or diverse. Thus commodities are unique in their use-values and identical in their values. The activity of the exchange of commodities is thus an expression of the social properties of commodities.
The capacity of human beings to transform natural substances into commodities , that is, the capacity to labor, is called labor power.
Labor power has both use-value and value, thus it is a commodity, although a unique one. Its use-value is not that of being consumable to people, which defines the use-value of all other commodities, but rather that of being the source of, the potential, of labor; its consumption is the production of labor, where labor is effort that produces commodities. Thus, human-beings, in laboring, are transforming labor power into labor on natural objects to produce commodities. Thus, labor power is the ability or the potential to labor and thus to create commodities Its value is the value of the commodities required to reproduce it.
That effort which produces waste is called work; that effort, as said above, that produces commodities is called labor. Labor power is the source of labor, that which produces commodities These commodities, in their consumption replenish the human being as a human being, including his labor power. Thus, all human beings possess labor power, but only producers labor, produce commodities; others work, producing waste. Some are unable or chose to do neither.
The producer class is part of the working class; those of the working class that are not producers produce those goods that are not commodities: these goods are called waste. Thus, those producing waste, work, but do not labor and although they have labor-power, they do not use their labor-power.
Thus, not all workers are producers; in fact, different workers might be actually making the same kinds of goods, such as factories, which may used in the production of automobiles used as consumer goods be commodities while other identical automobiles might be used to support an unnecessary military organization and thus be waste. Therefore, some of the workers are producers creating commodities and value, while others, even though they are producing exactly the same goods, are not. Thus, it is often not the individual worker who is a producer or not, but a segment of the population or working class or particular industry.
Some goods, such as weapons systems, legal systems, social welfare systems for non-producers, tax systems, and advertising systems, are not consumable and thus are not commodities (wealth), but are used to redistribute wealth or commodities, or may have other functions, such as military defense or defense against criminals. These systems therefore do not have use-value but they are useful to some groups of people and perhaps harmful to others. Goods that are not commodities and therefore that are not consumed by anybody, although they may be useful, are simply waste. Thus, goods are either commodities or waste. Useful goods not having use-value are not consumable, have no value and therefore no surplus value.
Goods not commodities, such as weapons, legal infrastructures, buildings housing various kinds of civilians and military, etc. may still may be useful in that they are useful to the owner class in the appropriation of wealth, but they themselves are not wealth or have any value or use value even though much work went into them. Thus, all goods are in some way useful. If they are also commodities, then not only are they useful, but they also have use-value. Natural substances, such as air and water, are useful, but since they are natural, they are not goods and therefore do not have use-value.
Although all commodities are consumable, not all that is consumable is a commodity; that is, some waste is also consumable. That which are commodities and thus consumable are such things as food, liquor, cigarettes, food, clothing, drugs, shelter, entertainment, etc.; that which is waste and also consumable are such things as advertisements, polluted air, food, and water, much packaging, etc. Waste that is not consumable are such things as armaments, legal systems, prisons, etc. The fundamental distinction between commodity and waste consumables is that the former are "freely" exchangeable while there is no choice but to consume the latter-- they are not freely exchanged. Thus, since there is only use-value in commodities, use-value is restricted only to those goods that are freely exchangeable.
There are boundaries, limits as what the producer class gets in return for its labor. It gets as a minimum that which is required for its physical, animal survival; its maximum is all of the goods, which then must be all commodities, or value it produces. The difference between the maximum and what it gets is called the surplus value. The size of the surplus value is largely a matter of class struggle. In fact, this is the source of the class struggle. Thus, the surplus value is not only an economic category, but it is also a political category. Furthermore, it is a personal struggle also; for the producers and those allied with them it is a struggle to become more human; for the owners, it is a struggle only to maximize profits and maintain their legal ownership of them.
How do we define surplus value? We define it as the difference in the value of the labor power-that is, in the value of the commodities required to reproduce the labor power-and the value in creates or produces by its (the labor power) labor in the production of commodities. Then how is a commodity defined? It is defined as that good, which is a transformation of a natural entity by human beings of a society acting in concert, into that consumed or transformed by the producers of the goods themselves. These commodities need not be useful in the sense of being helpful or necessary or good for the producer; in fact they may be harmful in all kinds of ways. The criteria distinguishing a commodity from a good is that commodities are all of and only those goods that are consumed by the producer of goods. Thus, all surplus value is created only by those who produced commodities, because only in commodities is there value
Commodities, as stated above, are those goods and only those goods, that are eventually consumed, whether it be food, housing, drugs, music, scenic views, or guns when used for the production of food for exchange, which today is rare. Again, all goods that are consumed by people are commodities. All the commodities the producer receives in exchange for the use of his labor power, are then eventually consumed, transformed into the replenishment, the reproduction, of labor power, where by labor power, once again, is meant the ability to produce, the source of all labor. Some non-producers not owners of capital receive commodities because they have no other means of livelihood; other non-producers receive commodities for their work, which creates only waste, a degradation of the value of labor power.
Now there are two significant points that arise here. One is that since in order for a good to be a commodity it must have use-value (except for labor-power); unless it is consumed by people it does not have use-value and therefore is not a commodity. Thus, if goods produced become obsolescent or are destroyed before they can be consumed, they have no use-value, they are not commodities. Since the labor power was already paid for when it was consumed and turned into labor, it is the owner of these goods, no longer commodities, who is left with a loss. The production of a commodity is completed only at the point of its consumption.
We may view the situation in the following manner. Goods are produced. These goods are placed in bins in a large room. In each bin is a different kind of good. These goods are owned by the capitalist. These goods are then shipped into 4 other rooms. One room is the waste room; all the goods shipped here will eventually be destroyed; Another room contains the goods which will go back to the producer. These goods, when first returned to the producer and then consumed, complete the production process; the goods become commodities only in their very consumption. The joy of the owner is in the exchange of the goods, for which he has no use, for the use of the labor power, for which he has much use. It is here that his economic orgasm is achieved; it is here that the surplus goods he owns becomes a surplus value, the source of all profit. If goods cannot be transformed into commodities, then they become waste in not going to the producer and are subtracted from his surplus value or the value of the labor power. On the other hand, the producer, in exchanging the use of his labor power for the goods may lose out since the goods may yet turn into waste since only in the very act of consumption do they turn into commodities. The third room contains the goods that go neither to the owner nor producer classes, but to others of the society; since these are consumed as commodities although they are not converted into labor power that will be used to produce value. In the fourth room the goods are the remaining goods; these goods belong to the owner. These are called the surplus value. The surplus value will then be loaned to the producers and the process is repeated, each time creating a larger surplus value.
A further correction needs to be made. Production does not necessarily end when the goods are consumed. There are at least two ways in which they may not. One is if there is harmful environmental waste ` produced. Since this must be removed or rendered harmless, the production process is not completed until this cost of the production process is paid for. This is one further area in which the struggle for the value of labor power is conducted. Insofar as the producer pays for this part of the process, the value of his labor power is mitigated and reduced. The other way in which the production process is not completed even though the commodity is consumed is in the shortening of the quality and length of the existence of the labor power for the producers. This can result from the production of commodities that are harmful and life-shortening for the producers, such as drugs, harmful foods, etc. Also poor working conditions can have the same effect. All deleterious effects that reduce the quality of the labor power or shorten its life enter the arena of the class struggle for the value of labor power. Who wins is determined in the class struggle. It is most noticeable in the effects upon particular oppressed groups. Thus, the dynamic of the production process concretizes itself over the lifetime of the producer over all the turgidities of its movements such as daily life quality, wars, depressions, ill health, discrimination, etc. All of these are directly involved in the payment by the capitalist for labor power. Thus, the class struggle is not restricted to the assembly line or the factory site of production but is deeply informed by social and political struggles on these various issues and should be so understood. The struggle only on the wage front is a misguided and harmful struggle which, except in the short run, then subverts the class struggle.
The concept of class struggle is to be distinguished from the awareness of class struggle, in both the personal and social.
Since it is only the producers that produce commodities, the consumption of commodities by others, not producers, cannot produce labor power; consumption for them is a totally different kind of act, not a creative or socially sustaining act; for individuals in the non-productive classes, the social and individual become one at the point only of consumption.[Neither here or above, is the identification a social deterministic one.](?)
It is only the producers who therefore produce surplus value. It is only they who provide the commodities to the workers who are non-producers, to the capitalists, who are non-producers, to the unemployed or insufficiently employed, who may also be largely non-producers; that is, it is they and only they who support the rest of the population. As capitalism develops, the proportion of producers decreases significantly, in fact, at an accelerated rate. This has great significance for the rate of profit, the supply of labor for expansion, etc. that needs to be worked out.
Now, in order to get goods all the producers need to do is labor. If they owned the goods they produced there would be one kind of economic system --socialism; if they didn't, if they were owned by another group- in this case, the capitalist- we would then have the system known as capitalism. How is this ownership established? The economic system is such that labor power can only produce labor if it is applied to natural substances or certain kinds of commodities. Thus, for labor power to function as labor not only are natural substances required, but also other commodities. These commodities, known as capital goods, are tools, machines, buildings, materials, etc. And these commodities are owned by the other class, the class known as the capitalist class. Beyond this, the fact of ownership is not an economic, but rather a legal fact and legal facts are established by law. The acceptance of law, however, generally requires both a coercive element and social acceptance element by the productive class.
In the labor theory of value the value of labor power is that of the labor or commodities that goes into its production or reproduction. The value of labor itself, that which goes into, is transformed into the value of all other commodities, is the value of the commodity; it is the time of laboring. All commodities that are exchanged are created in equal times. However, the time or value of labor power is less than the time or value of the labor that "arises" from it; that is, although the value of the labor power is the time going into its reproduction, it is then meaningless to say that the value or time of the labor power that is transformed into labor is the same as the value of the labor. Labor is not a commodity; labor power is a commodity. Labor is the use value of labor power. This , despite the fact that it has been clearly stated by Marx, has either been overlooked or disparaged by those who have, for one reason or another, overlooked this vital point. It is the value of the labor power that is shifted or transformed into commodities through the use value of labor power, labor. However it is necessary, nevertheless, to say that the values of the commodities or time for the creation of the commodities that go into the reproduction or production of the labor power is less than the value going from the labor power into the commodities; in fact, this is the source of surplus value. Thus, in these two value exchanges, into and out of labor power production, there is no equality, coming out being greater than going in. Labor power, therefore, although a commodity, is a very special, unique kind of commodity; it itself, as no other commodity can, creates value. That is, the human organism, through its labor power, can transform natural objects and environmental energy, in a way that natural objects or "dead labor" cannot do.
It is important to note that a commodity has a use value, that is, it is consumed by the producer. Thus, if goods are bought by the producer at their value but become socially useless before they are consumed fully, then their value is decreased. This means that more labor must be put into the commodities since some of it has been wasted but there has been no increase in the value of the labor power; thus, the surplus value has been increased. Thus, instead of talking about the realization of the value or profit, we say that value of the commodity is determined only by its production-consumption history, which can last in many cases, many years. Such a singleness of the concept of value is extremely important in consideration of long-term credit and innovation and invention or the rationalization of production, or where there are wars or other social upheavals. That is, the value of a commodity requires the good to have a use value; if the use-value disappears then so does the good as a commodity. This is because a good cannot be determined to have a use-value until it is used, consumed, or transformed into the social body of the producers. Often, but not always, a good can be projected as a commodity into appropriate times into the future, either in a certain or probabilistic way, thus making for write-offs of the value of the goods.
The function of the capitalist class is not to produce but to own. Since the producer class owns its labor power, under capitalism all that is left for capitalists to own are products or goods. Thus, the function of the capitalist class is to own an ever increasing amount of commodities. This ownership is obtained through the ownership of the special commodities mentioned in section 10- fixed capital. Thus, the producer, who must labor, or the worker, who must work, can only do so if the capitalist allows him to labor or work on the fixed capital. The agreement reached is that the capitalist will give the producer sufficient goods to live on, which, of course, will include commodities sufficient for the reproduction of the labor power if the producer will give the capitalist the use of his (the producer's) labor power. That is, the capitalist exchanges goods which has a value equal to that of the labor power for the use of the labor power. Labor power is useful to the capitalist, but it has no use-value for him, it is not a commodity for him; but since it is created or recreated by the consumption of commodities, it has a value. Thus, labor power is also a commodity. But it is a unique commodity since it is the only commodity that is a source of value; furthermore, in its actualization as labor it produces more value than is consumed in it creation. This surplus value produced by the labor is owned by the capitalist.
Furthermore, the worker is normally restricted in his consumption only to those commodities required for the reproduction of his labor-power. The needs he has for the transformation of himself outside of an economic entity are not only not provided but he normally is prevented by even knowing what they are; they are even confused by the identification of them with false ones, such as religion, wealth, and a host of other, often vicious, harmful, and asocial goals.
We now analyze the economic consequences of the basic interaction between the two classes. The first question to be asked in the analysis is: how does the capitalist class increase the amount of surplus value or amount of goods that it owns? The answer is that it does this by loaning the commodities it owns in an amount equal to the value of the labor power of the productive class that it will use. In this way, the capitalist gets not only his loan back but also the surplus value produced, thus increasing the amount of value he owns. In his process the capitalist accumulates surplus value continually. The producers are thus in ever increasing debt to the capitalists.
However, the capitalist gives back to the producers only his original investment, the cost of the labor power, and not the surplus. But he must invest the surplus in order to gain a profit or surplus value on it. Since he cannot give it back to the original workers unless they work longer hours, he must find other workers he can loan his money to. Thus, it is necessary for the capitalist to have a ready labor market. If such a market is available the capitalist then can invest the surplus value in them for further joy and profit.
Now, what happens if there is an insufficient labor market? Goods can still be exchanged for goods between the capitalists and for the most general commodity, money, but an increasing amount of goods are now unable to be exchanged for labor power. Many of these goods, if not used or consumed by people in a given time, then lose their use value and thus also their value; the very function of the capitalist class is negated. Since the capitalist has too many goods and cannot buy sufficient labor power he must lay off his workers and thus an unstable downward spiraling situation is produced. That is, the only way the capitalist system can work is by finding a source for the profitable consumption of the surplus goods already produced or being produced.
30. In actuality, at least two things are done: one is to find new labor markets and two is to rationalize the products. The rationalization of the products is the decrease of labor even though hey still perform the same function. There is also the development of new products. Let us consider the second one first. The rationalization of production will decrease the value of all commodities, including that of labor power. The amount of labor to create the same standard of living as before (the same kind and quantity of products) is decreased. Thus, the surplus not only of commodities but also of value, has increased. Thus, rationalization will aggravate the problem. It will increase the pressure for new labor markets. Notice that if there is uniform rationalization across all industries, the relative value of the goods, including the labor power, remains the same. Rationalization causes all values to decrease proportionately. Thus. if the standard of living is defined not by the value of the commodities produced but by the number and kinds of commodities received by the producer, then rationalization of this kind causes the value of the labor power to decrease and the surplus value to increase, keeping the same standard of living. On the other hand if standard of living is defined by the value of the labor power, then this kind of rationalization of production , for the same standard of living, will give the producers more commodities and keep the rate and amount of surplus valued the same. Which is chosen is determined by the consciousness and awareness of the producers and the relative class strength. Normally however, what is meant by standard of living is the former. Thus, that which is absolute about labor power is not the labor time that goes into creating it, its value, but actually the products or commodities that go into creating or recreating it.
We now consider the effects of increased productivity. Productivity can be increased by greater efficiency, less waste in the production process, rationalization of the means of production, less production of waste. We will again consider increased productivity not as increased productivity of work, but of labor and that part of work that produces goods for the consumption of producers that is not for the reproduction of labor power. It is not the (labor) value that determines the standard of living and the conditions of reproduction of labor power, but rather the quantity and kind of goods. Thus, with increased efficiency, the producer may have the same quantity of goods but decreased value. On the other hand there may be an increased variety of goods (commodities) not replacing other commodities, thus increasing the commodities required for the reproduction of labor power. This would actually increase the value of labor power but only proportionally to the surplus value. The capitalist is the source of the introduction of such trends.
Now, increased goods per hour of labor can be achieved in at least two ways. One is to decrease the surplus going to the capitalist and thus for the worker to be able to claim a greater share of the commodities and goods he produces. This involves class struggle and is an attempt to increase the value of labor power. On the other hand, increased rationalization of production will increase the amount of goods produced per hour of labor and thus not only can the capitalist increase the total amount of commodities he owns but so can the worker. This tends to decrease the value of labor power and also mitigates the class struggle. One other way is to decrease the amount of wasted goods and in their place substitute commodities. This keeps the value of labor power unchanged although the amount of goods per unit work increases.
The capitalist, on the other hand, will at least temporarily increase his profits if he can cheapen his goods. He can do this primarily by rationalization of production, at least until others can do the same thing. Thus, he is constantly seeking to lower the value of labor power. At the same time he attempts to sell dearly and pay as little as possible to his workers. This latter is an attempt to retain-- and thus own-- as much surplus as possible. The former, by another means, is also an attempt to increase the surplus he owns as much as possible.
But what is the function of an owned surplus to the capitalist? It has only one function (leaving out the secondary and general function of personal consumption) and that is to increase itself. Now, what is to increase, the value (in labor time) or the quantity of goods or commodities? It seems to me, for the moment anyway, that it is the amount of goods or commodities received as a fraction of the goods invested, no matter what the value. (This assumes no change in anything but the productivity of the labor.)This can mean an actual loss in value. But then what is the standard of value? Labor-time varies with technology and efficiency so that it cannot be the standard. If we take labor time at a particular time then there are two problems. One is that there is an inverse ratio between labor value and quantity of goods and secondly that new goods are being constantly produced whose labor cannot be compared to old labor.
Let us consider next the effect of increased technological advance. This not only increases productivity as increased efficiency does but it also replaces other machines and goods, negating the value in them. Thus, goods whose value has not yet been consumed or turned into labor power may become valueless. Thus, whether or not it is a commodity; i.e., it enters into the reproduction of labor power -or even into the standard of living generally- is not determined until it is consumed, until the actual transformation takes place. This is particularly true for long-lasting non-consumer goods such as factories and their machines. Such a process tends to devalue labor power considerably
One way of reinvesting one's profits, the surplus value, is to loan goods and commodities of considerable value, such as automobiles, houses, etc. to the producers or to invest in slow depreciation capital goods. A legal contract then binds producers in both cases to work into the future for the capitalist. In fact, this all that investment is. This too, because of the extra surplus value subtracted in the form of interest is a further devaluation of labor power.
Whether or not there is a crisis of the capitalist system then depends upon the answer to the following question: Can profits be reinvested so that there is a return? Profits, however, are not to be considered as surplus value but as a quantity of goods. Thus, one is not to be fundamentally concerned with the appreciation or depreciation of value essentially, but rather with the amount of commodities and goods produced- for the capitalist, relative to the amount of goods he invested. If this amount (that he receives) is greater than he put out, then, even though its value may be less, he has made a profit. In this way the standard of living may also increase. Then what causes the crisis? The situation is simple: The greater the proportion of goods going to the capitalist, the greater is the need for more producers. If new products are produced replacing the old, if new methods are developed for greater efficiency, then this is a loss of goods and profits for the capitalist if they have not yet been used. On the other hand, the cost of this can be and often is included in the cost of new development, thus, decreasing the value of the labor power. Therefore, we come down only to the ability of the capitalists to find new producers.
One way this has been done recently--since WWII-- is to introduce women into the work force extensively. But this has had a second considerable advantage -- by decreasing the value of the labor power of the family and thus the producer. Another way, of course, is the colonization of labor, both internal and external. The introduction into this country of large Hispanic and Asian populations furthers this. 	The third way is to cut back on the value of labor power by waste (military) and the cutting of domestic government programs. We see then that there are three ways to keep the system going; a. Increase exploitation. b. Bring in new populations of producers. c. Rationalize production and create new producers. Here, no new populations are needed. This is a form of exploitation. That is, the producers can now actually receive more goods but a smaller fraction of the total goods so that both their standard of living goes up and the surplus value, and thus profits, go up. (If instead of waste goods, commodities were produced, then, although the capitalist may neither lose nor gain, the producer would, even though his standard of living would go up. This will make (a) more difficult as it very well might, and result in (c) and thus increase pressure for (b). The crisis occurs when there are not enough producers to take the capitalist's goods from him and return more.) It is also helpful to depreciate or replace consumer goods as rapidly as possible with as small as possible loss to the consumer capital industries. It is highly probable that with sufficient credit; i.e., the legal borrowing of the capitalist's consumer goods by the producers in 1930-33, that the Depression could have been avoided. This, in fact, is exactly how Germany got out of the Depression in 1933. This is simply an extension further into the future of the legal ownership of the capitalists of the producer's labor power. And how far into the future can this mortgaging go? There is no end as long as the present surplus of commodities increases. This will result in: a. Increased waste, military, advertising, insurance, superstructures, perhaps drugs, welfare, unemployment. b. Increased colonialism, both internal and external. Maintenance of a large underemployed, semi-subsistent population. c. Increased technologization d. Increased capitalist consumption.
An intensified class struggle to overcome these tendencies is not necessarily called for in all segments of the producer class-only in the most exploited. There can be real economic splits now in the producer class. The system may be able to go on for a long time. Religion, cultism, etc. may then gain a considerable resurgence. Much intra-class conflict, new ideologies then are required to move people to socialism. These new ideologies can no longer be based solely or perhaps even largely on economic considerations. Marxism must now develop and detail a more comprehensive ideology. Flutterrings of this were seen in the 60's and 70's. We missed it. We must go back to the early Marx and leap up from it. (One thing we must do is to develop in all aspects or understand the developing culture of people.)
What prevents this "borrowing into the future" to go on indefinitely? When the capitalists give goods to producers in the present bound by a legal promise to pay in the future they nevertheless extract a surplus value equal to what the producers would have produced for them if the return on their goods was immediate. That is, if he could sell all his goods immediately, he would, at the end of the year, get all his goods back plus a certain surplus value. What he does now is sell all of his goods immediately. He must. Otherwise he will have a surplus and get all of it back in, say, 10 years, plus the same surplus as he would have gotten in the former case, that is, if he sold all his goods immediately. Sometimes this is explained or justified by saying that the higher rates of return are for "risk". This is nonsense: it must be because the return must be the same, no matter over what time period it is invested since otherwise there would be a flow of capital to the short-term investments until the situation equalized. The danger or limitation involved here is twofold: First, this can only be done for goods whose lifetime is at least that of the loan period. Thus, this immediately puts a limit on such things as cars, appliances, etc. The second thing is that technologization depreciates commodities so that this also inhibits time of investment. Of course, here there is also, because of obsolescence, a depreciation of the value of labor power. But no matter what is done, increased technologization, depreciation of the value of labor power, etc., the key is always finding not only enough labor power to use the foods and commodities produced, but more than enough so that its value does not tend to increase. Thus, the basic contradiction in capitalism is between the need for labor power (its use-value, labor) and the need to decrease its value. (Waste, of course, is one way - an indirect way - of doing the latter.)
A producer produces goods for himself and the waste worker. The waste worker is not a producer although he is a consumer. In this sense he is, to some extent, economically like a member of the family of a producer. The distinction is that his time is occupied (albeit wastefully). He produces no goods that go into the reproduction of labor power and thus produces no value and thus no profit can be made off of him. Thus, the commodities that go back to the producer are fewer and the value of his labor power is less than it would be if there were no waste workers. By increasing the waste workers there is no ease of the disposal of commodities, but there is a lowering of the value of labor power and thus an increase in the relative surplus value. Unless there is increased exploitation or increased labor power, however, there is a decrease in the total value produced, although the total surplus value will remain the same. Thus, there is always a tendency towards waste work and increased labor power, one to increase the absorption of commodities and the other to keep down the value of labor power. Waste, however, tends to decrease the standard of living, while technologization tends to increase it. Most important though, is that though the waste worker may be a member of the working class, he is not a member of the laboring class. Ideologically and economically this causes a severe rift in the working class.
Now let us apply these concepts to what is going on today. Specifically:(1)U.S. capitalists - and others- have enormous investments in countries, the value of whose labor power is low. (2) There is increased investment of foreign capital and consumer goods in the U.S. First of all, how do we explain (2)? We do this as follows: American capital since WWII has reaped an enormous amount of surplus value. During the late 40's, 50's and early 60's much of it went into increasing long-term loans to the American producer and increased technologization. However, an increasing amount began to go into foreign low value labor power markets, where the producers in these countries could produce a larger surplus value for U.S.- and to a lesser extent, other capitalists. This was the bringing into the capitalist system large populations of low value labor powers. This also tended to increasingly depress the value of the labor power of U.S. producers, particularly of the black workers. Foreign capitalists, Japanese, Canadian, British, etc. with a pool of labor power value cheaper than ours but also a more rationalized producer system (which also tends to reduce the value of the labor power) then could hire U.S. workers and make a reasonable surplus value out of them and by having a larger labor pool, prevent the value of the labor power of their own populace (producers) from rising or rising too rapidly. Thus, the U.S. producer is now increasingly committed to work for foreign capitalists in the future. The consequences of these differences in the national labor power values and the consequent investment invasion should now be evaluated - if they haven't been already --on the basis given here.
Let us now consider the effects of debt or loans to the producer. This arises in the following manner: The capitalist loans to the producer not only the value of the labor power but also the surplus value - that is, all the value, but he maintains legal claim or ownership of the surplus value and demands further surplus value; the entire surplus value is to be paid back over some period of time. What this "paid back" means is that the producer must produce for the capitalist the surplus value loaned or given to him plus the added amount (interest) over a period of time. This reduces the value of the labor power (depresses the value of the labor power, but not necessarily the standard of living) so that the producer may live exactly as before )(same quantity and quality of goods consumed) by incurring further debt; i.e., by continually getting back all the surplus value goods. This ends when the total surplus value produced equals the total value produced so that all the value produced is now surplus value and goes to the capitalist anyway. That is, the debt accumulates to the point where the payoff time can no longer be extended because it has reached the life-span of the commodity and all the value produced each month equals the surplus value.
Now, what is the effect of producing long lasting consumer goods versus short term or immediately consumable goods? All goods take a certain amount of time to be produced and consumed. The production of food takes months (and for the machinery even longer). Since all goods require buildings and machinery or equipment to produce they will all take more or less the same time. However, the value of some goods is consumed over much longer periods of time than other goods; e.g., houses vs. food. First, let us consider the effect of more and more labor going into indirect production. i.e., the production of buildings and machinery that themselves are not directly consumed by the producer but are used in the production of consumption or other goods. The time factor does not seem to be significant here except in this sense: much of this, as is true also of consumer goods such as automobiles and houses are consumed over a long period of time while the labor is expended over a short period of time. Thus, the capitalist pays the producers of the house (say), loans them the value of the house minus the surplus value so that the producer now has a house to live in. Then the producer is committed to labor for the capitalist over, say, the years of the house being consumed producing, say, 2 houses for him. This "loaning" process is fundamental to the capitalist in that he gains much surplus value this way - until all value becomes or approaches surplus value.
Let us consider the function of waste. The producer produces goods for which he receives part while the capitalist receives the other part. Some of the goods produced are useless. Therefore, these do not go back into labor power. Other producers therefore produce for all producers. Thus, the goods produced are divided as follows. The surplus value is taken off the top. Then some of the goods are wasted and the rest are given back to the producer as payment for the use of his surplus value. If the capitalist has difficulties now in disposing of the remainder of his goods (finding producers) he can take the unemployed or defense workers, etc. and give them the goods in order for them to become productive workers. This however has the effect of increasing the value of the labor power, although it increases the total surplus value.
Let us consider the effects of long-time production and long-time consumption. In long-time production, the capitalist does not accrue surplus goods until the productive process is completed; the producer, however, is getting goods from the capitalist. Thus, the effect of long-term production is the same as a legal commitment to the capitalist for the future use of labor power. That is, we must expect that long-term production, being like a loan, will accrue further surplus value or goods to the capitalist.
In long term consumption such as that of a house or car, there is likewise a loan or legal commitment on the part of the producer to the capitalist and thus the effect is the same - the surplus value accrued is the same whether it is short term or long term production or consumption.
Let us consider the function of savings. Savings simply mean that the producer does not consume all he gets - that he lowers his standard of living in exchange for a commitment from the capitalist on the goods he produces in the future. The commitment states that he is to get an increase of goods in the future because of his present reduction of goods sacrificed. Thus, the extra surplus value or goods received in the present by the capitalist now receiving surplus value from the savings of the producer, thus increases the total surplus value or goods he, the capitalist receives in a given time. The producer then gets back, in the future, his savings plus part of this surplus value. Thus, savings is another way that the surplus value, both relative and absolute, is increased.
Let us now consider the effect on the system of increased demand for labor. Such a demand would tend to decrease the surplus value. Since such a decrease must be avoided at all costs it means that the increase in the population brought into the capitalist system must be matched by a non-producing population brought into the system or shifted from producing to non-producing within the system. They, as non-producers are then supported by the producers and thus keep the standard of living down. These are the colonial oppressed, both within and without most capitalist nations. They serve the same function as waste industry- to decrease the value of labor power. That is, the function of the poorest segment of the population, particularly the blacks, is not only to provide a potential labor pool, but perhaps even more significantly to directly reduce the value of the labor power as if they were waste workers. Furthermore, since the productive class is made aware of this economic split, an ideological split also results. Interestingly enough, the greater economic cost to the producers is the economic split between the waste workers in the war and advertising industries but since they "produce" goods, it is easy to hide the economic split and thus, unless there is a reduction in their numbers, the ideological split.
Furthermore ,as the standard of living falls closer to that of the non-producing (indigent) population, the pressure on the producers to intensify or extend their labor increases - except for those that fall into the pit of the indigent. If the amount of surplus produced is so great, however, that even the indigent must be employed then there will be a general increase in the standard of living- as happened here and in Europe after WWII.
What is the meaning and effect of inflation? In inflation money is depreciated, but are the values they represent depreciated? Not if wages and profits arise proportionately. But all debts are depreciated. That is, the legal commitment is depreciated. This is, therefore, a loss of profit to the capitalist -and it can be a considerable loss. How does this arise? It arises if there are insufficient producers to absorb the surplus value. The capitalist then, in loaning the surplus value to the workers, cannot demand as much labor in return. This, in effect is the jacking up of wages. The capitalist then attempts to regain his lost surplus value by selling it high; i.e., giving less of it back to new workers. But this of course cannot be done because then wages go up further. Inflation is the response of the capitalist to a short labor supply;i.e., too much expansion (profit) relative to the labor supply. The only ways for the capitalist to cure this are: a) Further intensification of labor or increase of efficiency. b) Depreciation of the value of labor power by new products, industries, inventions, rationalizations. c) Increase of long term debt. d) New labor introduced into the economy. Although dangerous, it can be done by shifting labor from the unemployed and wastefully employed to the productive sector. The danger is that the price of labor power will go up faster than its value can be decreased (due to new products, rationalization, etc.).
Fair game for the capitalist is the legal commitment (savings) the producer has against him. These will be attacked when needed. This, of course, is what is happening to the S.&L. institutions and the attack on tax benefits for residences, the main source of savings for the producers.
More must be said about inflation. It can also be an artifact of the monetary system; i.e., a monetary artifact. If profits are low so that there is pressure to decrease wages this can be done by deflating the value of the money by inflating the amount of money. This of course changes nothing except that it might lead to the collapse of the monetary system. Inflation leads to higher interest rates in order to recoup the profits; higher interest rates on the other hand, prevent or retard inflation. Now higher interest rates must mean a lower rate of profit. This means shortage of labor, insufficient rationalization of industry and thus too much expansion.
What causes a depression? A depression must (will) occur when the following condition is met: The surplus value produced over the years is loaned back to the producers- at a cost. This cost is a further reduction of the value of the labor power and thus a further increase in the surplus value. At some point the producer is no longer able to go into further debt. It is at this point that the system collapses and we have a depression. The only way out is to further extend the time or period of the debt so that more of the surplus value is given back to the producer immediately. This of course is at the cost of more surplus value. This can be cut back until the rate of return on the debt (surplus value already produced) is greater than the daily (or yearly) rate at which it is being produced. The only thing then for the capitalist to do is to lengthen or stretch out the debt period. Because of the rationalization of industry (production of new products) this produces its own costs until the extra cost of lengthening the debt period produces no decrease in the debt payment.
How then does one get out a depression? Specifically, how did we get out of the depression of the thirties? This was done as follows: The government took its reservoir of funds, gave some of it to the capitalists who then hired producers, whose pay was then, to a considerable extent, taken away by the government, much of which then went back to the capitalists; this is the creation of the war debt incurred during this period, largely to the capitalist class.
We have to do two things to correct the analysis presented here. This correction will make it all the more powerful. The first thing where an error is made is in the following: all commodities are exchanged at their value; this includes labor power. This means that labor power is exchanged not only for what are called the necessities of life, such as food, clothing, shelter, transportation, etc. but also such things as advertising, armaments, all government expense. In this case (in the latter circumstances) the consumer as the government buys these various goods (commodities); the very fact that they are bought means that they have a use value to the consumer, where the consumer as a social entity is now the government. Eventually, of course, all of these commodities are exchanged for the labor power of the producer. Insofar as the consumer, and thus the producer, chooses his government and thus his government can be said to represent him, he is buying these goods or commodities and thus they go into the reproduction of his labor power. This is also true of advertising, since it is also, although indirectly and hidden, exchanged for labor power.
Now it is not the question of whether or not the choice by the producer as consumer decides freely what products go into the reproduction of his labor power; the very fact that he buys a product is considered a free choice; only if he is physically forced to buy certain products or his laboring is not free, can one discuss unequal exchange. This point of view is absolutely necessary since even the basic necessities of life such as food, clothing, shelter, transportation, etc. are, in their form and quantity, determined by the production process. That is, an economic decision is considered to be free just because it is a decision; that is, there are no unfree economic decisions. This, of course, does not mean that the decision (always taken in the social sense) is not determined by the ruling or capitalist class on the basis of the kind of production that develops at a given time and place. Thus, the class struggle, which is basically the struggle to determine the value of labor power, is also one to determine the kind of commodities and the kind of labor that constitutes labor power. That is, the functioning of the capitalist system centers around, is focused on the value of labor power, but is also a struggle over the nature of labor power in the determination of the kinds of commodities required to reproduce it. Thus, although the kind of commodities required to reproduce labor power is chosen by the producer as consumer, it is largely determined by the capitalist or ruling class. In this sense, one can question whether or not or what manner labor power is the property of the individual; there seems to be a confusion here. It can be cleared up if one can say that a choice, by definition, is always free, that is made by the individual or group, and yet can be and often is determined by others. Then one can say that labor power is owned by the producer and thus he makes all decisions concerning it, but these decisions are determined, in this case, by the buyer of the labor power. That is, the decision is made by the producer to waste the value of his labor power, although the decision is determined by the buyer of the labor power. It is important to point out that the class struggle is struggle not only over economic matters but a political-social struggle to determine our production-consumption activities; that is, to determine our basic activities as human beings.
That is, labor power is never fully transformed into labor, and thus surplus value, until the act of consumption takes place. This act of consumption is not only the recreation of the labor power of the productive worker, but also the struggle between the owner class and the productive class over the class and personal struggle for the producer to exercise his choice to become free, liberated. We will see later that both of these points will come together. The success of the class struggle for the producer class is first determined by the enhancement or at least the maintenance of the value of the labor power under the conditions of a monolithically expanding or collapsing economic production golem, but the more fully mature struggle is measured by the increasing transformation of this economic struggle into one for the right of the producers and others to achieve their rights as more than producers of labor power, surplus value and profits, as more than economic units but as human beings; that is, to be able to use their consumption not only as a class function, to convert it into labor power, but to supersede the production of labor-power and in an individual way as a living of their uniqueness; this is the beginning of liberation. The acceptance of such a goal implies the deepening of our understanding of a highly democratized praxis in specific details in present-day society.
The irrevocable need in a capitalist system being the need for surplus value is always to reduce the amount of labor required to produce a commodity, any commodity, including labor power, to reduce its value. Thus, generally, the thrust of a capitalist society is to encourage and fund scientific and technological innovation insofar as it leads to the reduction of value of commodities and thus of labor power. In this it has been eminently successful. The consequences of this have been not only the reduction of the values of commodities but also the constant introduction of new commodities. The result has been to increase the amount of use-values and commodities going into the standard of living mainly of the producers in the more advanced capitalist countries while decreasing the value of all commodities, and thus, of labor power. Such an apparently contradictory result now generally accompanies the inherent expansion of capital into new labor markets everywhere in the world. Such a trend would tend to mitigate the class struggle in the more developed capitalist countries, although the accompanying severity of the resulting crises will have the opposite effect, especially in the more recently developed capitalist economies.
Is technological innovation an economic activity or is it an anti-economic activity, where one might define an anti-economic activity as one that tends to separate the use-values of a commodity from the value of a commodity. Thus, the very functioning of an advanced capitalistic economy such as we have today in its drive to continually increase surplus value and thus profits depreciates value and increases use-value, at least for a segment of the producers temporarily. One further point should be mentioned. It is claimed that the owners of capital are many and that it is not the owners but the managers who control capital; in fact, the owners, on the whole, have very little control over the use of capital. This argument, even if true, is merely a clever dissemble. The situation here is no different than people putting money in the bank, which enormous numbers of us do. Thus, most of the money that the bank invests is our money and it gets a certain return known as interest. And of course it is the bank managers that control the funds, even though it is ours. And if we don't like the return we can switch to another bank, effectively firing the manager. But of course the bank uses our funds in order to get a net return on it. That is, the return that the bank gets on our money is larger than what the bank gives us. It is in this manner that further surplus value is extracted from us, because large money gets a greater proportional return than small money. Every financial transaction eventually is an attempt to further extract surplus value from the producers. If it were otherwise, it would not be capitalism. Although it is claimed that the producer owns his labor power, he does not determine the use of his labor power. Furthermore, he largely does not even determine the commodities that he consumes to reproduce his labor power. The food he buys, the clothes he wears, the transportation he uses, the very details of his day-to-day existence, in the consumption of the commodities presented to him, even into the cells of his culture, are not of his choice. But not only is it not of his choice, not only is it harmful for him often as not, but it is a cheapening of the value of his labor power exactly in the same fashion as was done in company towns. The actual wage paid the worker, the bag of commodities he receives is not determined at the end of the day or week or month, but at the very moment of consumption. That is, the producer is squeezed in all possible ways and from all sides. The wealth he produces must indeed be enormous in that for most of them their standard of living, at least in the highly industrialized countries is relatively quite high.
We thus have a clear distinction between two basic concepts: the very meaning of choice means free choice and free choice here means the choice to exchange what one owns for something else. Thus, the xchange of one's labor power for its value in the form of armaments, advertising, etc., since it is done without the use of compulsion is a free choice. The sources of this free choice, its causal determination, its antecedent matrix, however, is not necessarily determined by the individual or individuals making the free choice. Such a lack of synonymy is known as alienation. Becoming aware of the illusion of the synonymy and ability then to exchange one's labor power for commodity forms of values that are basic to the potentiation of the organism becomes then a significant step towards the attainment of freedom.
In light of the above analysis, we now restate the key to the capitalist system, namely the class struggle. The class struggle is defined as the struggle of the producer class to develop its own humanity versus the struggle of the capitalist class to own as many commodities as possible, as much value as possible. These struggles meet in the transformation of labor power into value in the production process as the class struggle where the value of the labor power and its recognition as the foundation of the producer's humanity is determined. The core of this, for the producer, is to receive as many goods per unit work as he can, while for the capitalist it is to keep his costs at a minimum. It is only as the owner of labor power that the producer as producer has any power or authority to receive goods upon which to support and develop himself as a human being. And it is only as class conscious producers that they begin to lay the basis for the development of society as human society
Social activity (social operation) may be an operation on a natural object, the transformation of a natural object into a social object. This requires the transformation of labor power into labor or work. This happens only in an economic society. A human being is more than labor power. Social activity, therefore, in a post-economic society, must be the transformation of (post labor power) attributes of a human being operating on natural objects into post-commodities through a post-labor activity.
The creation of commodities, except labor power, is an economic activity. That is, the creation of commodities by laboring is an economic activity. But the creation of labor power is not created by laboring, but rather by the consumption of commodities. Therefore, the creation of this commodity is more than just an economic activity; it is the production of a commodity by the consumption of commodities; it is the transformation of commodities into the commodity of labor power. The amount or value of commodities required for the reproduction of labor power is defined under specific social, historical, and technological conditions. This is true for any commodity. That is, the amount of labor it takes to produce a given commodity depends on the technology, the historical and social conditions.This is particularly true of the commodity of labor power.
What are laws of society or for that matter laws of people or any kind of laws? Laws are the irrevocable ways of behavior of nature, societies, people, etc. Thus, a law of physics says that something in nature will always happen, is always true. A probabilistic law, if there is such a thing, is always true also. A law of society is also something that is always true. Thus, a law of society may be that all social phenomena arise from economic activity. Marx, of course, never made such a statement. He did state that the dominant ideas of a time arise from the productive (that is, the way people produced the commodities, the goods) relationships of people. He did say that the legal and state system also arose from their productive (economic) relationship. This statement is either true of false or has some truth to it. This is not only an empirical question, however, but also a theoretical question. That is, can one, to some extent, deduce the conclusion from the premise of the meaning of the concept of economic activity or relationship. I strongly suspect that this can be done. A very legitimate question, however, is: what determines what the productive relationships are between people? To say that they themselves must be or are economic relationships gets us nowhere; that is no explanation. Eventually, as Marx clearly indicates in his early work, which laid the basis for his later work and was not in contradiction to it, economic relationships between people arise in a society in which there is a historically evolved way in which people relate to each other in the way they produce their goods and commodities. He is very clear in stating that the commodities produced express and are the objectification of their fundamental relationships, where by fundamental is simply the way they obtain their food, clothing, shelter, etc., that is, at least early on, how they biologically, as animals, exist. However, people are not just animals, even in surviving in the most basic, elemental ways. Thus, from the very beginning, their survival is a human survival and is done in a human way. A human way means that in the very production of goods for themselves it is done not instinctually, but in learned and creative ways, in ways that have developed historically. But being human beings, there is something even more and that is, Marx claims, that there are human qualities, arising from the very nature of the human being and not being part of the nature of any other animal, that find their objectification and expression in that very economic activity. That is, the culture and institutions of people is not the economic activity of people, is not caused by the economic activity of people, but comes into being, finds its expression in that context, on that basis. That is, a given basis, or economic structure is necessary for a given culture, but is not sufficient for a given culture, does not determine that culture. The question then is, what else is required to determine the culture, the institutions, revolution, societal changes, etc.?
Thus, the human being through its exercise of labor power, through its very activity as a human being in its self-manifestation, creates value; the exercise of laboring creates values. Labor is not, like labor power a commodity; this is a miscategorization. It is, rather the activity of labor power on natural objects taking a certain time. That is, the very act of laboring is not only a replacement, a transfer of value among commodities, but a creation of value during this transfer. However, this has to said more acutely and more precisely. The transformation of a natural object into a socially useful one, that is, one that is consumed by people for the continuance of their lives, or, from a broader point of view, the production of the means of life for any living organism, bug or plant, does not necessarily require an active role of the organism itself. On the other hand , if we go to the other extreme, then all the commodities required for the life of an individual would go into the labor or effort to produce them. Historically, this must have happened many times; in fact, historically there were times in which the surplus value was negative; that is, the labor of individuals was insufficient to produce enough to even maintain life. It certainly is true that various organisms, species, died out because animals or organisms, no matter what effort they put out, could not produce enough for survival. The conditions of survival, that is, to produce commodities that are sufficient to replace the consumption or destruction of the commodities required to do this depends on factors external to this process of laboring and thus are two independent processes. Thus, the survival needs of an organism depend on the biology of the organism and its particular environment. The ability of the organism to appropriate the necessities to survive also depends on its biology and its particular environment, both functions largely independent of each other. However, for human beings , not only is the connection more intimate, but not as absolute, more flexible, than with any other organisms. But, and this is the key point: the two processes are not only not identical, but are constantly changing due to the creative role of human beings in their productive processes.
Let us once again consider the nature of the value of labor power. Its value is equivalent to the value of all the commodities required for its reproduction; that is, its value is that time required to produce or reproduce or restore the labor power to its original condition. Now suppose that we had two different societies; one in which the time of reproduction was greater than the other-for whatever reason. Then, in that society the value of the labor power would be greater than in the other. But suppose that the labor power was the same but that there was a group of people who were not productive but supported by the productive people. Then not all the commodities produced would go back to the producers- some going to the non-producers. This then in effect would reduce their standard of living by increasing the surplus value. Thus, every product earned, every product going into the support of the producers-part of it would be taken away, thus decreasing the value of the labor power or increasing the value of the surplus.
Once again, how is the value of the labor power determined? It is determined by the class struggle, period. Its maximum is all the commodities produced; its minimum is somewhat vague and undefined, being that amount required for existence. Once again, on the value of labor power. The commodities consumed in order to reproduce labor power are alcohol, cigarettes, unhealthy foods, etc. and not only resurrecting commodities. That is, not all commodities are necessarily good or positive. Furthermore, other commodities, such as entertainment, relaxation, news, information, etc. can be debilitating, anti-human, perversely ideological, and can in both general and specific ways keep us in perverse social and individual situations, in fact, in largely harmful situations. All of these things we create, we put our labor into and thus, they are the commodities that go into the reproduction of our labor power; they are not only wasteful, but harmful; not only harmful, but absolutely destructive both individually and socially. The very ideology, including racism, sexism, egoism, etc. are included in the very foods we eat and drink and thus are the substance of our labor power. In this way, we do not only create commodities and thus value and surplus value, but we also, in our very consumption and productive activities, create as use values the very ideological values of the capitalistic system. Thus, any class struggle can never be one only to increase the value of labor power, to increase our share of the surplus, for the very value that we create in a capitalistic society is, although necessary, also corrupt. Any class struggle must also be one to transform the very quality of the use value that is created. That is, the ideology of the capitalistic system is not separate from the foods we eat and drink, the very use values of the commodities. The struggle must be one also of use value transformation.
Through the compulsion of the transformation of his consumption into labor power in an economic society, the individual producer is transformed into a link in the tight loop of commodity production; there then is no way out and the producer never becomes an individual; his life is not for himself, but only as the cow for the production of the milk of labor power. Nevertheless, even though commodities, insofar as they are consumed reproduce labor power, it is during the recreation of this labor power that he producer simultaneously also recreates his existence as a living, unique human being outside of his re-creation of himself as useful in his labor-power. It is at this very point that his social or class struggles over the value of his labor power become can become identified with his personal struggle to assert his being beyond that of his labor power and as his own particular uniqueness.
The nature of the commodities consumed is not fully determined by the producer himself. In fact, the commodities consumed are to a significant degree destructive of not only the labor power of the producer but of his very humanity. That is, it is at the point of self-reproduction, both social and individual, in the consumption of commodities, that the personal and social become identified with each other, become one. On the other hand, the moment of identification of the capitalist's social and personal identities is when the labor power of the producer becomes fully expressed, by labor, into commodities; this nexus is the capitalist's end of the class struggle.
It should be clearly noted that the means required for the survival of a social being or beings is more than the commodities required for the reproduction of the organism's labor power. Only in sufficiently advanced stages of socialism, when the value of labor power approaches zero, in which then the human being is no longer an economic unit in an economic society, does the separation of the human being into a biologically surviving and economic entity disappear; he then supercedes these categories and becomes a self-determining, and thus a free social individual. Freedom is a chimera if one is subject to societal laws, particularly the Law of Value, which, as we have seen, works irrevocably in a capitalist society.
However, there is an apparent exchange, but is actually a devaluation of the value of labor power. Since the value of a commodity is not fully determined until the commodity is consumed, any insurance on commodities is a degradation of the total value which the producer pays. Thus, the buyer of a house pays for the full value of the house before it is fully consumed. If it burns down before it is fully amortized, fully consumed, then the buyer, the producer pays the capitalist, the owner of the capital more than the value of the house. If the buyer also buys insurance then he also pays for the insurance (the premiums). That is, if there is a standard rate of house burnings or losses, then the cost of the house should take this into account in determining the actual value of the house. Any premiums which are then paid are an added cost, depreciating the value of the labor power. Any fees, interest payments are exactly of the same nature. Thus, the payment of insurance premiums or interest is only a disguise for the exchange of commodities; there is only an apparent exchange; the actuality is a further increase in the surplus value through the decrease in the value of the labor power.
The concept of "freedom," a concept arising in the very basis of economics, must be dealt with. In some very significant way the concept of exchange implies a free process. That is, both sides to the exchange must be able to chose freely. Thus, employers must be able to chose freely; that is, they can chose their employees, those whose labor power they wish to buy and are free to pay them in exchange what they wish to. On the other hand, the employee, the seller of the labor power, is free to chose who to sell his labor power to how much he will exchange it for. He is also free to chose how to transform this payment into commodities, to determine what commodities he needs and wants. But these freedoms conflict. And within this conflict arises necessary restraints on each group. This need for the freedom of each group gives rise to attempts, both by force and suasion, to maximize the satisfaction of one's own needs and wants and thus to minimize the satisfaction of the needs and wants of the other group. This is known as the class struggle. However, the concept of freedom, a concept fundamental to economics requires a much more extensive analysis. This will be delayed until later.
On the other hand, there is another issue. Even though commodities, insofar as they are consumed by producers, reproduce labor power, it is during the recreation of this labor power that the producer simultaneously also recreates his existence as a living, unique human being outside of his re-creation of himself as labor-power. It is at this very point that his social or class struggles over the value of his labor power becomes identified with his personal struggle to assert his being beyond that of the general nature of labor power and as his own particular uniqueness. Through the compulsion of the transformation of his consumption into labor power in an economic society, the individual producer is transformed into a link in the tight loop of commodity production; there then is no way out and the producer never becomes an individual; his life is not for himself, but only as the cow for the production of the milk of labor power.

BASIC CONCEPTS

DEVELOPMENT OF THEORY

DEEPENING OF BASI C CONCEPTS

DEEPENING AND EXTENSION O THE THEORY