On Marx’s Theory of Surplus Value

Hardial Bains

With the law of surplus value, Marx discovered the origin and growth of capitalist profit and laid bare the “economic law of motion of modern society.” This problem had puzzled all earlier political economists, who, however closely they had approached the labour theory of value, had been unable to explain the origin of profit in a scientific way.

Engels explained:
“Marx also discovered the special law of motion governing the present-day capitalist mode of production and the bourgeois society that this mode of production created. The discovery of surplus-value suddenly threw light on the problem, in trying to solve which all previous investigations, of both bourgeois economists and socialist critics, had been groping in the dark.”¹

After the first industrial crisis of 1825, and with the complete ascendency to political power of the bourgeoisie in France and England after 1830, the bourgeoisie, confronted by the development of the proletarian class struggle, was forced to abandon all scientific political economy. Marx explained in the Afterword to the Second German Edition of Capital:
“In France and in England the bourgeoisie had conquered political power. Thenceforth, the class struggle, practically as well as theoretically, took on more and more outspoken and threatening forms. It sounded the knell of scientific bourgeois economy. It was thenceforth no longer a question, whether this theorem or that was true, but whether it was useful to capital or harmful, expedient or inexpedient, politically dangerous or not. In place if disinterested inquirers, there were hired prize-fighters; in place of genuine scientific research, the bad conscience and evil intent of apologetic.”²

From the 1840’s onward, Marx developed his economic doctrine on the basis of the economic law of motion of modern society. Thenceforth, the scientific position in political economy was synonymous with Marxism. Scientific rigour became synonymous with proletarian partisanship, because Marxism showed that crises and the other ills of capitalism could be ended once and for all only by putting an end to the capitalist system, and that the condition of the working class under capitalism, the condition of wage-slavery, the claims which bound the worker hand and foot to capital, could be smashed only by the revolutionary overthrow of all existing conditions, of the bourgeois order.

With the growth of capitalism into monopoly capitalism and imperialism, all the contradictions of capitalism are aggravated to the extreme; the necessity for revolution to resolve these problems, far from becoming an increasingly remote prospect, becomes the issue of the day, the problem taken up for solution.

Today, just as when Marx made his thoroughgoing analysis of commodity production under capitalism, the worker has nothing to sell but his labour power; he is a wage slave forced to sell himself in the market-place in order to gain a living. The development if large-scale production, the relentless concentration of production and capital in fewer hands, the growth of finance capital, the export of capital around the world, the division of the world amongst the imperialist powers — none of this has negated the basic economic laws of capitalism discovered by Marx. The present objective conditions only reconfirm the validity of Marx’s economic doctrine.

It is the compelling truth of Marx’s economic doctrine and the power of his teachings that force the apologists of the bourgeoisie, all its hired prize-fighters, onto the field against Marxism, to “invalidate” and “disprove” it. Today, as in the past, these apologists come forward with arguments to justify the exploitation of the workers and the profit system. In Marx’s day, they claimed that the capitalist was entitled to a “return” for his “abstinence,” for his “risk-taking,” for his “wages of superintendence.” But all these arguments fell before the scientific proof that no matter what justification was given for profits, interest, rent and other returns to the owners of bourgeois property, this return could be paid only out of what was produced by the living labour of the working class and other toilers in the course of material production. The bourgeoisie denied the labour theory of value altogether. It made “value” synonymous with “price” and maintained that prices were determined by the forces of “supply and demand,” and especially by the satisfaction of the subjective desires of the consumers, so that there was and could be no objective measure of the value of labour.

With this psychological explanation of value, the bourgeois economists hoped both to eliminate the labour theory of value and the justify the unequal division of the fruits of labour between the exploiters and exploited, between the rich and poor. One of the originators of the psychological theory of value based on the utilitarian philosophy, W.S. Jevons, also put forward the theory that the periodic crises of capitalism can be explained by sunspot activity! And this new version of the value theory appeared simultaneously in England, Austria and France in 1871, at a time of sharp class battles, at the time of the revolt of the Paris proletariat and establishment of the Paris Commune.

With the development of capitalism to the stage of monopoly capitalism, the revisionist theoreticians sought to discredit the Marxist economic doctrine on the basis of so-called “new data” of economic development. They insisted that the rate of concentration and destruction of small-scale production was proceeding only very slowly in industry, and in agriculture not at all; that crises had become rarer and of less force; that cartels and trusts would enable crises to be done away with altogether; that the theory of “collapse” was unsound because class antagonisms were becoming less acute. As a whole, they argued that the development of capitalism into monopoly capitalism was easing and even eliminating the contradictions of capitalism.

Lenin came out in struggle against the revisionists who sought to alter the conclusions of Marx, to eliminate the recognition of the economic laws of motion of capitalism and to eliminate the class struggle. Lenin showed that in its development, capitalism had proceeded on the basis of the economic laws discovered by Marx. It had developed into monopoly capitalism with the concentration of capital and production on a large scale, and this had intensified the class antagonisms. He pointed out:
“Realties very soon made it clear to the revisionists that crises were not a thing of the past; prosperity was followed by a crisis. The forms, the sequence, the picture of a particular crisis changed, but crises remained an inevitable component of the capitalist system. While uniting production, the cartels and trusts at the same time, and in a way that was obvious to all, aggravated the anarchy of production, the insecurity of existence of the proletariat and the oppression of capital, thereby intensifying class antagonisms to an unprecedented degree.”³

In his monumental work, Imperialism, the Highest Stage of Capitalism, Lenin described how capitalism had developed into the stage of monopoly capitalism, capitalist imperialism. He showed how the features of monopoly capitalism, its moribund and parasitic character, had developed on the basis of the economic laws discovered by Marx: the growth of concentration of capital and production and the emergence of monopolies; the development of finance capital through the merging of industrial capital and bank capital under the domination of the banks; the export of capital; and the division of the world among the capitalist monopolies and the imperialist powers. He described imperialism as the stage of capitalism when the revolution is the order of the day, the problem taken up for solution. In particular, Lenin analyzed the operation of the basic economic law of capitalism under modern conditions of monopoly capitalism and concluded that the capitalists seek maximum profits by exacting tribute from every cell of the society. Thus, he concluded:
“Finance capital, concentrated in a few hands and exercising a virtual monopoly, exacts enormous and ever-increasing profits from the floating of companies, issue of stock, state loans, etc., strengthens the domination of the financial oligarchy and levies tribute upon the whole of the society for the benefit of the monopolies.”⁴

Stalin formulated this law precisely in his work, Economic Problems of Socialism in the USSR, showing that the basic economic law of capitalism remains the law of surplus-value, which explains the origin and growth of capitalist profit, and that although the operation of this law is modified under imperialism, its principles are unchanged. Stalin concluded that the main features and requirements of the basic economic law of modern capitalism might be formulated as:
“the securing of the maximum capitalist profit through the exploitation, ruin and impoverishment of the majority of the population of the given country, through the enslavement and systematic robbery of the peoples of other countries, especially backward countries, and, lastly, through wars and militarization of the national economy, which are utilized for the obtaining of the highest profit.”⁵

Thus Stalin refuted the views of the modern revisionists such as Browder and Tito who claimed that monopoly capitalism in the U.S. was “young capitalism,” that the socialist economy was compatible with the capitalist market and commodity circulation and with the operation of the law of value as the regulator of production and distribution.

Enver Hoxha defended the Marxist teaching on the law of surplus-value and the development of this idea by Lenin and Stalin under the conditions of imperialism. In his important work, Imperialism and the Revolution, he notes that:
“The concentration and centralization of production and capital, which characterize the capitalist world today and have led to extensive socialization of production, have not in any way altered the exploiting nature of imperialism. On the contrary, they have increased and intensified the oppression and impoverishment of the working people. (…) Today, just as in the past, the colossal income and superprofits realized from the savage exploitation of workers are appropriated by a handful of capitalist magnates. Likewise, the means of production, with which the united branches of industry have been equipped, are the private property of capitalists, while the working class remains enslaved to the owners of the means of production and its labour power remains a market commodity.”⁶

Enver Hoxha also exposed the operation of the law of value in the Soviet Union after the revisionists seized power and restored capitalism. He showed how in this capitalist society, which was created on the basis of a retrogression from existing socialism, the surplus-value was distributed among the new Soviet bourgeoisie according to their positions in the economic, political, and scientific-institutional apparatus. Enver Hoxha points out:
“Although it is claimed that the principle of remuneration according to work is applied (in the Soviet Union) in reality the different groups of the new bourgeoisie appropriate the surplus-value created by the workers and peasants. All this robbery is presented as a kind of material stimulus, allegedly to encourage productive activity, scientific work, artistic creativeness, etc. In reality, this is a typical capitalist exploitation.”⁷

To be continued

1. Frederick Engels, “Speech at the Graveside of Karl Marx,” Marx and Engels, Selected Works Vol. 3 (Moscow: Progress Publishers, 1970), p.162.
2. Karl Marx, Capital, Vol. I op. cit., pp. 24–25.
3. V.I. Lenin, “Marxism and Revisionism,” Collected Works, Vol. 15 (Moscow: Progress Publishes, 1973), p. 35.
4. V.I. Lenin, “Imperialism, the Highest Stage of Capitalism,” Collected Works, Vol. 22 (Moscow: Progress Publishers, 1964), p. 232.
5. J.V. Stalin, “Economic Problems of Socialism in the U.S.S.R.,” Selected Works, op. cit., p. 572.
6. Enver Hoxha, Imperialism and the Revolution (Toronto: Norman Bethune Institute, 1979), pp. 79–81.
7. Enver Hoxha, Report to the Eighth Congress of the Party of Labour of Albania (Toronto: Marx, Engels, Lenin, Stalin Institute, 1981), p. 240.

Source: https://web.archive.org/web/20001214090100/http://cpcml.ca/TML/articles/99-0928.html