Originally published in the Morning Star

No, to both questions.  Private property pre-dates capitalism and will survive long after it has been abolished.  But it is important to distinguish personal possessions – your clothes, bicycle, your home (if you ‘own’ it) from capital.  Capital is a particular form of private property — including factories, mines, transport and energy utilities, shops, offices, and, increasingly, financial capital — that enables its owners to make profit from the work of others, and to accumulate yet more capital, and power!

Property that is ‘private’ gives the owner the right to exclude others from its use.  It existed well before capitalism, certainly way back to the ‘invention’ of agriculture (although anthropologists tell us that some supposedly ‘primitive’ peoples today believe that objects are ‘possessed’ only while they are being used – otherwise they are held in common). 

Socialists believe that capital (not personal possessions) should be socially owned.  In Britain after the Second World War, key industries – coal, steel, transport – were taken into social ownership, as were large sections of what we now call ‘public services’.  This was bitterly resisted by the capitalist class and in many areas (including health and education) social ownership was only partial. 

The ruling (capitalist) class has been trying to turn the clock back ever since and in recent decades it has been quite successful, especially in relation to what used to be profitable nationalised industries (automobiles, steel) or where it appeared that a profit could be made (utilities like water, energy, transport). 

Mostly where this has happened it is the consumer (the ‘customer’) who has suffered, along with the workers in those previously public enterprises.  Competition amongst energy distributors would (we were told) drive prices down.  In practice a handful of companies act as a cartel so that even when world energy prices fall, the benefits are not passed on to the consumer. 

The privatised rail operators have been able to manipulate the licensing system so that they effectively pay dividends to shareholders from direct public subsidy which is far greater than the former state support provided to publicly owned British Rail.  East Coast Mainline was able to walk away from its franchise without serious penalties when the ludicrously unreal projections that won it the contract turned out to be fantasy.  It had to be taken back into public ownership where it proved to be so profitable that it was privatised again – it is now part of the Virgin group.  And the story of Southern Rail is notorious and needs no repeating here – commuters continue to suffer the consequences of a franchise which guarantees profits for its owners no matter how poor the service they provide. 

Where wholesale privatisation is not immediately feasible, private capital has milked public enterprises for profits through its control over inputs and resources and though mandatory outsourcing.  The crisis in the NHS is only partly due to lack of resources (financial and human).  Equally important it continues to be bled and undermined by private companies. 

In December last year the drug company Pfizer was fined a record £84.2m for price-fixing with Flynn Pharma to charge £67.50 instead of £2.83 for each 100mg pack of an anti-epilepsy medicine – raising the annual cost to the NHS from around £2m in 2012 to £50m the following year - an increase of 2,600%.  Owen Smith – Jeremy Corbyn’s challenger for the Labour Party leadership – was a parliamentary lobbyist for Pfizer before becoming an MP.  One of his first speeches (in a 2010 debate on epilepsy) called on ministers to ‘improve incentives’ for pharmaceutical companies.  

Add to this the daily profits of companies like Serco and Sodexo which go unchallenged, including non-medical ‘services’ like catering, cleaning and car parking — all paid for by the taxpayer and resulting in a deteriorating quality of provision and increased pressures on staff — and it is clear where the crisis in the NHS comes from.

This is why socialists are concerned about the issue of ownership.  The form that social ownership will take – and has taken – under socialism is variable; there is no single model.  ‘Nationalisation’ in post-War Britain and the relatively centralised management of large state-controlled enterprises in the former Soviet Union contrasted with a more mixed economy in the GDR and a high degree of decentralisation and worker control in socialist Yugoslavia. 

Part of the struggle for socialism in Britain will need to involve a debate around the merits of different forms of social ownership and management.  It is likely that in a socialist Britain there would be a plurality of models – from centralised utilities (like electricity and gas) with a high degree of worker participation, to independent retail cooperatives or partnerships all existing alongside small and medium sized, privately run enterprises – farms, small manufacturers, restaurants, shops, IT and design companies &c. 

Part of this debate will also challenge the notion that ‘freedom’ lies solely in the possession of individual property.  As Marx declared: ‘Private property has made us so stupid and one-sided that an object is only ours when we have it - when it exists for us as capital, or when it is directly possessed, eaten, drunk, worn, inhabited, etc.’  At the same time Marx and Engels stated, in the Communist Manifesto (using the gendered language of the time) that ‘Communism deprives no man of the ability to appropriate the fruits of his labour. The only thing it deprives him of is the ability to enslave others by means of such appropriations.’

Within socialism, the distinction between capital (property which allows the owner to accumulate more wealth by exploiting others) and personal possessions (including your own ‘means of subsistence’ if you are self-employed or a small business) will be fundamental. 

And what is ‘ours’ will of necessity take on a new meaning particularly in relation to social property.  Our transport systems, utilities, a revived manufacturing sector and our banks, will be truly ‘ours’; the challenge will be to develop that same sense of ownership, pride and responsibility that many people already have for their local park, playground, street or school.  

Tuesday, 02 May 2017 13:19

What is Exploitation?

‘Exploitation’ can mean taking unfair advantage of someone, emotionally or physically.  But in economics, Marxists also use the term exploitation in a very specific, technical sense, relating to the way in which goods and services are produced and traded and who benefits. 

Capitalism is based on the supposed supremacy of the market — of free transactions where buyer and seller are at liberty to decide what they want to buy and sell, to whom, and for how much.  This fiction of a free market is carried through into employment.  The worker is ‘free’ to choose who to work for and for what wage; and the employer, free also to select the worker and what to pay. 

Socialists have always challenged this fairy-tale of a ‘fair exchange’ between buyer and seller – including the process whereby working people get paid for doing a job.  They point out that power ultimately lies with the owner of capital — the ‘means of production’.  Working people have no alternative but to sell their capacity to work because they have no other means of subsistence. The savings of the average household in Britain today would last no more than 16 weeks.

Only through long years of struggle have safeguards been secured – on working conditions, paid holidays, against discrimination and unfair dismissal and (most recently) the minimum wage.  Socialists oppose the drive to reverse these limited advances and the current attack on trades unions and collective action which have secured them, and they seek to stem the tide towards casualisation and the ‘gig economy’.

A Marxist analysis goes further and deeper than this.  Labour (work) is fundamental to all societies and is the only source of new value.  And it creates more value than what workers and their families need to survive.  This added value is what enables societies to develop and grow.  Yet under capitalism workers receive in wages only a fraction of the total new value that they create, generally equivalent to what is needed for the subsistence and reproduction of labour. 

In pre-capitalist societies, under feudalism or in slave society, this surplus was extracted by fear and force.  Under capitalism it is extracted through the market in employment.  Workers sell their capacity to work – what Marx called their labour power.  Employers then seek to extract the maximum value from this labour power and they do so within a legal framework established by the capitalist state. 

In these circumstances, and before or without the protection of a trades union, workers will sell their labour power, on average, around the cost of its reproduction – what it takes to sustain themselves and their families (including the next generation of workers).  The actual process of exploitation is not simple.  It depends on how much value the capitalist can extract from those who have sold their labour power, and how large a surplus the employer can make. 

As Marx and Engels put it, workers are in effect paid for only part of the time that they work.  The rest of the time they are effectively working for free – producing more value which is taken by their employer.  This is quite separate from the additional £33.6 billion creamed off by employers for the 2.1 bn hours of unpaid overtime put in by workers during 2016.[1]

The difference between the value that the worker produces and what s/he receives in wages is called ‘surplus value’.  Marx and Engels were not the first to put forward a labour theory of value, nor did they invent the term surplus value. What they did do was to examine in detail the way that production, distribution and exchange operate within capitalism.  In particular they distinguished between value and price, and between surplus value and profit. 

Surplus value is appropriated by different sections of the owning class in different forms.  Part of it may be taken in rent by the owners of land, buildings or machinery. Part is taken as interest by banks.  The majority goes in profit to the owners of capital, to be invested in new capital, or for their own consumption.  In Britain today around 46 per cent of total national production is taken as rent, interest or profit.  This represents the ‘rate of exploitation’ and it has increased sharply since the 1970s.

Profit is the realisation of surplus value in money and is almost always distanced in place and time from the site of its creation.  If you are a craftsperson, making something for your employer to sell, their profit (above the cost of their own and others’ labour) may be obvious.  But if you provide a service — whether it’s accountancy medicine, teaching or zoo-keeping — the surplus value you generate may go through several transformations and be realised as profit in a number of different ways. 

And even if you are genuinely self-employed (much self-employment is fictitious, to help firms avoid complying with employment legislation) or if you work for a non-profit organisation, you still generate surplus value for someone — that is, you receive less in wages than the value you create.  Under capitalism you are still, technically, exploited. 

As a self-employed contractor you may name your fee and ‘choose’ your client (though your customer probably has a greater choice of whom to employ and what to pay).  But though your product may not directly profit your client, its value will be realised in a number of different ways downstream.  And the same applies if you work for a social enterprise, whether it’s a charity, a co-operative or a public service.   

So, back to where we started.  Exploitation is taking an unfair advantage of someone — emotionally, physically or financially.  But Marxism isn’t only about morality, individual or corporate.  It’s also about understanding how the world works.  A Marxist analysis of the work process shows that we’re all exploited, though some may be exploited more than others. 

Exploitation is built in to the economics of capitalism, it is an essential and inescapable element.  That’s why we need to replace it with something better. 

[1] Morning Star, February 24, 2017; ‘Bosses cream £33.6 billion a year in unpaid overtime as Britain marks Work Your Hours Day’

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