On Working-Class Consumption

E. On Working-Class Consumption

Marx clarifies that he was engaged in only a limited range of issues concerning overproduction. His object was to provide a preliminary account of “the predispo- sition to [overproduction] as it is posited in primitive form in the relation of capital itself,” rather than an analysis of overproduction “in all its specific characteristics” (MECW 28: 345). Thus he omitted “the other possessing and consuming classes, etc., which do not produce but live from their revenue, and therefore exchange with capital” – “better dealt with in connection with accumulation” – and focused on consumption by wage workers. Nevertheless, we may note here that whereas Mill rejected out of hand the Malthus-Sismondi position regarding secular demand constraints, Marx commended Malthus for his appreciation of the “contradictions between capital as instrument of production in general” – the physical dimension of wealth – and capital as “instrument of production of value,” entailing the necessity to create new markets (344). Regarding unproductive consumption he commented: “Malthus [1836: 314–30] was quite consistent when, along with surplus labour and surplus capital, he demands surplus idlers, consuming without producing, postulating the necessity of waste, luxury, extravagant spending, etc.” (328). And

he did not deny that “[i]n the further development of capital, we find that along- side the industrial part of this surplus population – the industrial capitalists – a purely consuming part branches off. Idlers whose business it is to consume alien products, and [who,] since crude consumption has its limits, have to have a part of these products forwarded to them in refined form, as luxury products” (527). 22

But the focus was on working-class consumption, Marx taking as starting point Malthus’s position that “[t]he consumption and demand occasioned by the work- men employed in productive labour can never alone furnish a motive to the

accumulation and employment of capital . . . ” (Malthus 1836: 315). 23 That “the

22 The extended citations from Malthus’s posthumously published Principles include the following: “ . . . [p]rofits are invariably measured by value and never by quantity” (Malthus

1836: 266). “[T]he wealth of a country depends partly upon the quantity of produce obtained by its labour, and partly upon such an adaptation of this quantity to the wants and powers of the existing population as is calculated to give it value” (301). “[T]he powers of production, to whatever extent they may exist, are not alone sufficient to secure the creation of a proportionate degree of wealth. Something else seems to be necessary in order to call these powers fully into action. This is an effectual and unchecked demand for all that is produced. And what appears to contribute most to the attainment of this object, is such a distribution of produce, and such an adaptation of this produce to the wants of those who are to consume it, as constantly to increase the exchangeable value of the whole mass” (361). 23 Marx cites a summary formulation by Malthus’s editor [Malthus 1836: 405n]: “The demand created by the productive labourer himself can never be an adequate demand, because it does

1857–1858 II: Value “Realization”

consumption of the workers is by no means by itself a sufficient consumption for the capitalist” is also attributed to Sismondi (1837–38 1: 61) (MECW 28: 339–40).

First to be noted is that consumption by wage workers is conceived not as entail- ing the direct advance of wage-goods – as in earlier institutional arrangement based on slavery, or patriarchal rural-industrial production – but as part of the general circulation or exchange process: “[I]n production based on capital, consumption is at all points mediated by exchange, and labour never has direct use value for those who perform it. Its whole basis is labour as exchange value and as producer of exchange value” (345). Thus “[t]hrough the exchange between the part of capital which is determined as wages and his living labour capacity, the exchange value of this part of capital is directly posited before capital again steps out of the produc- tion process to enter into circulation; or this may itself be conceived of as an act of circulation” (346).

We should also note Marx’s treatment earlier in the Grundrisse of laborers’ consumption on a par with that of all others from the perspective of circulation. The point reflects the more general proposition that “[s]ince exchange value is only realised in money, and the system of exchange value has only been realised with the rise of a developed money system or conversely, the money system can in fact only be the realisation of this system of freedom and equality” (177). That “equality is established quite objectively in money when in circulation, appearing now in the hands of one person, now in the hands of another, and quite indifferent to where it appears,” is illustrated specifically by reference to a “worker who buys

a commodity for 3s. appear[ing] to the seller in the same function, in the same equality, in the form of 3s., as the king who buys this commodity. All difference between them is extinguished. The seller qua seller appears only as the possessor of

a commodity priced at 3s., so that both [buyer and seller] are perfectly equal, except that the 3s. exist once in the form of silver, the other time in the form of sugar, etc.” (177–8). 24

Although all this points distinctly away from strict wage-fund reasoning involv- ing the direct advance of wage goods, Marx did sometimes make use of the advances concept in his model building; even the orthodox term “destined” is to be found in specific analytical exercises. For example:

not go to the full extent of what he produces. If it did, there would be no profit, consequently no motive to employ him. The very existence of a profit upon any commodity presupposes a demand exterior to that of the labour which has produced it” (MECW 28: 345); see also below, p. 288.)

24 Cf: The worker “confronts the capitalist in circulation simply as M [money], and the capitalist confronts him as C [commodity]; he confronts the capitalist as realiser of the price of C, which

is therefore presupposed for him just as it is for every other representative of M, i.e. for every other buyer” (MECW 28: 354). Also: “the relative limitation of the range of the workers’ consumption, which is only quantitative, not qualitative, or rather qualitative only as posited by quantity, gives them as consumers (in the course of the further analysis of capital, the relationship of consumption and production must, in general, be considered more closely) a quite different importance as agents of production from that which they possess and possessed

E. On Working-Class Consumption 287 In so far as the surplus product is valorised anew as surplus capital, enters anew the

production process and the process of self-valorisation, it divides itself into (1) means of subsistence for the workers to be exchanged for living labour capacity. Let us define this part of capital as the wages fund. This wages fund, the part destined for the maintenance of labour capacity – and for its progressive maintenance, since surplus capital grows continuously – now appears as the product of alien labour, of labour alien to capital, just as much as do (2) the other components of [surplus] capital – the physical conditions for the reproduction of a value = these means of subsistence + a surplus value (383).

The dual approach to wages – reflecting, on the one hand, a vision of actual economic organization and, on the other, specific analytical exercises – has much in common with that of J. S. Mill (see Hollander 1985: 387–400).

What happens though to the central notion that capitalists purchase labor power in the representation of economic organization elaborated above in Chapter 8? That dimension is certainly retained but is treated as operationally irrelevant. For the circumstance that a worker’s consumption “renew[s] his own use value for a certain time” (213), does not affect his activity in the market as consumer which is “not restricted to particular objects, nor to a particular kind of satisfaction”:

As in the case of every individual standing in circulation as subject, the worker is the owner of a use value; he disposes of it for money, the general form of wealth, but only in order to dispose of this money in turn for commodities as objects of his immediate consumption, as the means for the satisfaction of his needs. Since he exchanges his use value for the general form of wealth, he shares in the enjoyment of general wealth up to the limit of his equivalent. . . . But he is not restricted to particular objects, nor to a particular kind of satisfaction. The range of his enjoyments is not limited qualitatively, but only quantitatively. This distinguishes him from the slave, serf, etc.

On the other hand, Marx emphasises that the world of markets is “illusory,” hiding the truth of what is at play even from the worker himself whose freedom of choice is far more restricted than might appear: “while the worker receives his equivalent in the form of money, in the form of general wealth, he figures in this exchange as the equal of the capitalist, like every other exchanger; at least, in appearance. . . . This appearance, however, exists as an illusion on his part and to a certain extent on the

other side. . . . ” 25 For in the final resort – as we mentioned in Chapter 8, p. 238 – what the worker gets is “not exchange value, not wealth, but means of subsistence, objects to sustain his life, satisfaction of his needs in general, of his physical, social, etc., needs. It is a specific equivalent in means of subsistence, objectified labour, measured by the production costs of his labour” (214); only to the extent that workers engage in saving could it be said that “in the exchange of the worker with capital, his object – and therefore also the product of the exchange for him – is not means of subsistence but wealth, not a particular use value, but exchange value as such,” the latter referring to the accumulation of money.

∗∗∗ 25 The illusory world of markets masks the entire concept of surplus value of which the purchase

1857–1858 II: Value “Realization”

We return now to the “illusory” world of markets and Malthus’s problem of the significance of labor’s consumption from the perspective of stimulus to production (above, p. 285). Working-class accumulation, we have seen, was for Marx the exception not the rule, considering the subsistence-wage presumed to apply; but Marx did consider the exception and allowed that saving by workers – were they to respond positively to contemporary efforts to encourage Savings Banks – would have serious consequences: “the damage they would do to general consumption – the loss would be enormous – therefore also to production – therefore also to the number and volume of exchangers that they could make with capital, therefore to themselves as workers” (215). This capitalist employers well understood, for though each wished to reduce his own workers’ consumption he does not wish to see general consumption fall: “each capitalist certainly demands that his workers should save, but only his own, because they confront him as workers; but by no means the remaining world of workers, because they confront him as consumers. In spite of all ‘pious’ phrases, he therefore tries to find all kinds of means to spur them on to consumption, to endow his commodities with new attractions, to

talk the workers into feeling new needs, etc.” (217). 26 Similarly, “[i]n relation to each capitalist the total mass of all workers except his own appears not as workers but as consumers, possessors of exchange values (wages), of money, which they exchange for his commodities. They are so many centres of circulation, from which the act of exchange begins and by means of which the exchange value of capital is

preserved. . . . ” (346). 27 Again we note the operational irrelevance of “labor power.” Now although the “essential relationship” for Marx was that of “each capitalist to his workers,” the counterpart so to speak of the “general relationship of capi- tal and labour” wherein aggregate wages constitute a cost item, nevertheless, the relationship of one capitalist with the employees of other capitalists – an aspect of inter-capital competition with which Marx was not yet fully preoccupied – had profound implications. Specifically, each capitalist perceived “that apart from his own workers, the rest of the working class confronts him not as workers, but as consumers and exchangers – as moneyspenders [forgetting] that, as Malthus says, “the very existence of a profit upon any commodity presupposes a demand exte- rior to that of the labourer who has produced it,” and hence the “demand of the

labourer himself can never be an adequate demand ” (see note 23). 28 In short, “the 26 Marx adds that “[t]his relationship between production and consumption is only to be devel-

oped later, under capital and profit, etc., or also under accumulation and competition of capitals” (MECW 28: 217). 27 Marx adds: “The greater their number – the greater the size of the industrial population – and the greater the amount of money over which they dispose, the greater the sphere of exchange for capital. We have seen that it is the tendency of capital to increase the industrial population as much as possible” (MECW 28: 346). On this tendency, see Chapter 8, p. 247. 28 Marx’s attitude towards Proudhon in this context is mixed: “Proudhon . . . derives overpro- duction from the fact that ‘the worker cannot buy back his product,’” but failed to understand the source of profit, and the relation of between price and value (MECW 28: 352). On this issue, see also Chapter 8, p. 243.

289 demand of the working class posited by production itself appears to each individual

F. Summary and Conclusion

capital as an ‘adequate demand,’ ” thereby “driv[ing] on production beyond the proportion in which it would have to produce with regard to the [effective demand of] workers . . . ” (349). Alternatively expressed, “it is owing to the competition of capitals, their indifference to and independence of one another, that the individual capital does not relate to the workers of the entire remaining capital as workers: hinc is driven beyond the right proportion.” It is an illusion exploded with the cyclical downturn: “On the other hand, the demand exterior to the demand of the labourer himself disappears or shrinks, hence the collapse occurs. Capital itself then regards the demand of the labourer, i.e. the payment of wages upon which this demand is based, not as gain but as loss, i.e. the immanent relationship of capital and labour asserts itself.”

Marx carries his analysis much further, the illusion of adequate demand also emerging with respect to all intermediate or productive exchanges; “Exactly the same is true of the demand created by production itself for the raw materials, semi- furnished products, machinery, means of communication, and for the accessory materials used in production, such as dyes, coal, tallow, soap, etc. This demand, being effective and positing exchange value, is adequate and sufficient as long as the producers exchange among themselves. Its inadequacy becomes evident as soon as the final product encounters its limit in immediate and final consumption.” 29