THE SURPLUS VALUE OF LABOR
(Comments: tony.papard@btinternet.com)
Karl Marx used this phrase, 'the surplus value of labor', to describe the source of capitalist profit and speculation, which is in fact blatant exploitation of the workers' labor.
It doesn't matter how this unearned income is raised, it amounts to stealing from the workers' wage packets. Without labor, nothing has any trading value whatsoever. Of course it may have other value - sentimental value for instance, or we can highly value people, animals and objects we love. But when it comes to buying and selling, the price of that product/raw material/property reflects either the labor involved in making the product/extracting the raw material and processing it, or in the case of undeveloped property, the potential value after labor power is applied to add value. What use is a piece of land unless labor power is employed to build a home, or develop it into some other kind of facility? What value is gold if it remains buried deep underground, unless miners' labor power us employed to extract it, and others' labor power is then employed to convert the raw material into an object of beauty? If gold coins fell from the sky every day, gold would be worthless.
Having said this, under capitalism where market forces rule, there is something called 'scarcity value' which is dependent on the laws of supply and demand. If something is very rare, much sought after or in short/limited supply, it increases its market value. So land for development in a prime site by the sea, for instance, will be worth more than land in the middle of an inner city slum, even though the labor required to develop both sites might be just the same. However, once you allow the laws of 'supply and demand' and 'market forces' to take charge, society is in deep trouble. This is why, under true Socialism, prices and markets are controlled by the State to prevent such speculation. Otherwise all prime land and objects of value will be bought up by speculators for their personal profit.
Speculators acquire property, not for their own personal use, but in order to make a profit. It might be undeveloped land, homes, offices, cars, antiques - almost anything. Having acquired this property they then hold on to it till the laws of 'supply and demand' increase its value. In some cases they realize this value without selling their capital, for instance when a landlord rents out properties or when a car hire firm rents out cars. This is all speculation, and under Socialism would be made illegal.
If you have a valuable antique in your attic and you decide to sell it, that is your choice. Maybe you would rather have the cash than the object itself. Similarly if your home is rather too big, and you may take in a lodger to help with the rent. The State should not intervene unless someone is deliberately buying up property/objects solely for the purpose of making a profit.
Take rents on property for a start. The owner of the property, be it land, a home or an office block, rarely sees the value of that property diminish as the laws of supply and demand constantly push these prices higher. Yet the landlord who buys up loads of property can rent it out, and make a fortune in unearned income. At the end of the day they can then sell the property and make a huge profit. The State needs to intervene to strictly control rents. All the landlord should be allowed to charge is the cost of maintaining the property, and collecting the rents. This would provide a wage for those involved in doing this work, i.e. the value of their labor power.
With things like cars it is a bit different. They quickly depreciate in value, so this must be accounted for when hiring them out. The State should control car hire prices to reflect the cost of maintaining the vehicles, of organizing the hiring out of them and collecting the fees, and the wear and tear which depreciates the value of the vehicle. By setting the hire charges correctly and selling vehicles when they are a year or so old, the stock can be constantly replenished.
Antique dealers need to have a certain expertise to search for and recognize genuine antiques, restore them if necessary and then make them available for purchase to members of the public. It is therefore quite legitimate for the antique dealer to charge for his expertise, which is, in fact, his labor power. However, with antiques, like all other property, prices and profits need to be controlled by the State.
Under Socialism all speculation on capital assets should be made illegal. Otherwise capitalist speculators can hold the rest of us to ransom. They can buy up all available property/commodities and control the market, pushing up prices. If there is a glut of a certain commodity, they may deliberately dispose of the surplus in order to push up prices, even if it is food and people in the developing countries are starving.
By controlling markets and pushing up prices, capitalists exploit the workers at the point of sale. We then find, for instance, that in places like London, nurses and manual laborers cannot afford to even rent a flat, let alone buy one. This is just another form of exploitation of labor. People suffering from famine in the developing world starve to death, whilst food mountains are deliberately destroyed to maintain high prices in the developed world.
The only solution, under true Socialism, is for all markets and prices to be controlled by the State. All profit on private selling of property needs to be heavily controlled and taxed. The benefits of increased values caused by their scarcity can then be used for the benefit of society as a whole, not for the enrichment of private speculators. Surpluses of food, instead of being destroyed, can then be delivered to the parts of the world that need it. Under true Socialism society benefits, not the private speculator.