Exploitation & Surplus Value

Human labor is a commodity — a thing of value. It is also a value that, when used, creates value. It is from the labor of the worker that the owner derives profit. If a worker is slated to work eight hours, a small percentage of that time is spent covering the cost of the worker’s wage. The rest of the time is unpaid labor — surplus labor — and it is from this that the owner gains extra or surplus value.

All that extra time, the worker gets nothing and the owner reaps all the benefits. The owners do everything necessary to increase the flow of profit: they fire workers, while expecting those who remain to increase productivity; they decrease bene- fits; they set workers in competition with one another, a process which drives down wages. All these things cause misery for the workers but are designed to increase profit. That profit is split between the owners and the high-end managers, but none goes to the workers who create it.

How many times has a company announced layoffs, all while CEO types get bonuses or raises for “tightening the belt”? A good example is that of Circuit City, which in early 2007 had 46,000 workers in Canada and the U.S.

In April of 2007, Circuit City, the second-largest electronic retailer in the U.S., decided to lay off 3,400 workers because they were “being paid too much.” The company did this because it had only an 8 percent growth in sales in the previous quarter, and sales were forecast to grow to only 10 percent in the next quarter.

While Circuit City started off paying workers merely $7.75 an hour and its average employee made only $10 an hour, it stated that its chief rival paid its workers less on average and that it could not compete while paying an average wage that translates to just $19,200 per year before taxes. The poverty threshold in the U.S. for a family of three in 2006 was a little more than $16,000 before taxes.

The workers were told they could reapply for their jobs at lower pay. But the CEO of Circuit City continued to receive $8.52 million, including a $975,000 salary, a year. Upon news of the layoffs, the stock value of the company rose 1.9 percent.

Millions of people around the world go hungry and lack access to clean water, health care, adequate housing, clothing and transportation. Yet so much goes to waste in the so-called developed world.

Factories close; companies go belly-up as each capitalist tries to outdo the other and in the process they produce and produce. As their unplanned, anarchic production leads to a crisis of overproduction they transfer the crisis to the workers, with pay cuts, mass layoffs and firings. This boom-or-bust reality is because of the nature of the system, which is to reap greater and greater profits regardless of what is actually needed.

In times of crisis, the capitalists need new markets, cheaper access to resources and new, cheaper, easily exploitable labor. This fuels the drive to war.

If one were to add the expense of war — both in monetary and more tragic human loss — the waste makes even less sense.

The base Pentagon budget alone for fiscal year 2013 was $530 billion. This does not account for the billions spent on the U.S. imperial military adventures in Iraq, Pakistan, Libya, Afghanistan and elsewhere. Hundreds of thousands of Iraqi, Pakistani, Libyan and Afghan people, and thousands of young women and men drawn into the U.S. military, have been killed and maimed.

But what is the answer? The answer is the abolition of the capitalist system and the expropriation of the capitalist class. In the place of the capitalist system a system based on actual human need, in solidarity with the oppressed and workers the world over, needs to be built. The system of socialism removes the profit motive; the means of production are held and developed by the entire society for the need of all in society, not for profit.

It is through this system that problems as they come are dealt with, as it is through need and solidarity that problems are solved, not through profit.

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