Sociology102 Guest lecture The effects of capitalism on work: the impossibility of an ethical capitalism Nathalie Jaques

Lecture outline Laws of capital accumulation Historical forms of capitalism Labour struggles against capital Case study: The Living Wage The imperative to resist

Laws of capital accumulation: Primitive accumulation Establishes the necessary social relations of capitalism: workers and capitalists (the capital relation) The existence of the wage labourer is contingent upon a prior historical shift that divorces the worker from the means of subsistence and production and thus ‘divorces the worker from the ownership of the conditions of his own labour’ (Marx, 1867: 874).

Laws of capital accumulation: Productive and unproductive labour The value of labour is defined in terms of capitalist production Productive labour is only that which creates profit for capital Explains the devaluing of domestic labour and reproductive labour, predominantly carried out by women. We have the labour power (unemployed and underemployed) and resources to carry out innumerable social projects that are not considered profitable enough for capital, e.g. free tertiary education, universal health care, alternative energy, climate change, food distribution.

Laws of capital accumulation: Surplus Value The productive power of labour for capital is ‘the excess of labour which the labourer returns to the capitalist over and above the quantity of labour he receives in wages’ (Marx, 1861-1863a: 354). This relation emerges when the worker ‘objectifies more labour time in his product than is objectified in the product that keeps him in existence as a worker. It is this kind of productive labour that is the basis for the existence of capital’ (1861-1863b: 9). The fundamental struggle between labour and capital is the rate of exploitation, how much of the workers product they receive in wages and the capitalist receives in profit.

Laws of capital accumulation: Wages Means of subsistence – what the worker needs to survive ‘A man must always live by his work, and his wages must at least be sufficient to maintain him. They must even upon most occasions be somewhat more; otherwise it would be impossible for him to bring up a family, and the race of such workmen could not last beyond the first generation’ (Smith, 1776/1999: 170).

Laws of capital accumulation: Socially Necessary The means of subsistence varies in time and place, it is shaped by the social and historical context of the worker. ‘It varies at different times in the same country, and very materially differs in different countries. It essentially depends on the habits and customs of the people’ (Ricardo, 1817/1971: 118). ‘the number and extent of his so-called socially necessary requirements, as also the manner in which they are satisfied, are themselves products of history, and depend therefore to a great extent on the level of civilization attained by a country; in particular they depend upon the conditions in which, and consequently on the habits and expectations with which, the class of free workers has been formed. In contrast, therefore, with the case of other commodities, the determination of the value of labour-power contains a historical and moral element’ (Marx, 1867/1990: 275).

Socially necessary Socially necessary is a CONTESTED category, the workers want to increase it, the owners want to decrease it. The key point here is that capitalism does not look the same everywhere, it adapts to the social context – for example very low wages, exploitative conditions for Bangladeshi garment workers compared to the New Zealand minimum wage. The difference here is the political organisation of capitalism (if the government intervenes and enforces domestic regulations etc.)

Historical Forms of capitalism Defined by the relative strength of labour and capital in any given context Social democratic (Keynesian) – labour strong Neoliberalism (Monetarism) – labour weak, capital strong Within the global economy, labour is weaker and stronger in different contexts, this is a key motivation for outsourcing and offshoring production to weaker sites of labour.

Labour struggles against capital Many of the now normalised social rights and protections were only made possible through ongoing struggle and resistance. Capital has never willingly conceded opportunities for greater exploitation and profit. ‘Capitalism will never fall on its own. It will have to be pushed. The accumulation of capital will never cease. It will have to be stopped. The capitalist class will never willingly surrender its power. It will have to be dispossessed’ (Harvey, 2010 :260).

Case study: The Living Wage Historical living wage campaigns became now commonplace minimum wage laws. In a contemporary context, living wages respond to: Failure of business and government to provide wages in keeping with the cost of living Low wages have been reconceptualised as poverty pay, where workers live a sub-poverty level existence despite being in full-time, year round employment. large scale reduction in government based systems for the working poor to offset the consequences of declining real wages USA: In the 30 years between 1968 and 2000, productivity grew 74.2%, profits rose 64% in the same period while average wages fell 3% and the minimum wage fell 35% when adjusted for inflation rates (Muilenburg and Singh, 2007: 27)

Case study: The Living Wage Financialised economies resulted in increased unemployment and declining wages as previously full time positions were replaced with low wage, part-time, positions with significantly reduced or entirely removed employee benefits. Subcontracting labour: reduces costs of labour and removes ability for staff to negotiate wages and working conditions

Case study: The Living Wage The contemporary living wage movement is motivated by the belief that full time workers should not have to be trapped in or raise a family in poverty. However, they generally extend beyond purely economic considerations and incorporate conditions of dignity, self-respect, and participate in civic life. Current living wage is $19.80 ($792 p/w) – For Auckland would be $24.11 at 2014 calculation ($964.4 p/w). Current minimum wage is $15.25 ($610 p/w)

Goals of Living Wages limitations on public money subsidising business interests, challenging the normalisation of insecure working conditions, increasing levels of unionisation among low wage workers, responding to extreme levels of poverty and inequality, and reframing the current narrative of economic policy to reorient government agendas towards putting people before profit, thereby empowering the political voice of communities. The living wage contests the socially necessary means of subsistence, a new moral limit on capital.

The impossibility of ethical capitalism Capitalism must always operate by its governing laws of motion, it must always seek greater levels of profit to escape its crisis tendencies. Capital must always place downward pressure on wages, working conditions and social rights. The fundamental laws of capital accumulation are premised on dispossession, exploitation, deprivation and inequality. Capital will always seek to transcend and circumvent social and moral limits imposed on it.

The imperative to resist It is because capital always seeks new and expanding spaces to exploit that we must resist, to defend the victories of the past and to pave new roads for a future emancipated from the violence and exploitation of capital.

References: Harvey, David. (2010). The Enigma of Capital: and the Crises of Capitalism. London: Profile books. Marx, Karl. (1990/1867). Capital Volume one: A Critique of Political Economy. Trans. Ben Fowkes. London: Penguin. Marx, Karl. (1861-1863a/1988). ‘Theories of Surplus Value.’ In Karl Marx, Frederick Engels: Collected Works, Economic Manuscripts of 1861 - 1863, Volume 30.. London: Lawrence & Wishart. Marx, Karl. (1861-1863b/1989). ‘Theories of Surplus Value (continuation).’ In Karl Marx, Frederick Engels: Collected Works, Economic Manuscripts of 1861 - 1863, Volume 31. London: Lawrence & Wishart. Muilenburg, Kamal, and Gandaram Singh. (2007). ‘The Modern Living Wage Movement.’ Compensation & Benefits Review, 39(1): 21-28. Ricardo, David. (1817/1971). On the Principle of Political Economy and Taxation. Middlesex: Penguin. Smith, Adam. (1776/1999). The Wealth of Nations. London: Penguin.