THEORY OF VALUE AND SURPLUS VALUE

Writing an essay that explores the Value and Surplus Value theory is the primary goal of this assignment. This essay also explains how changes in the length of the workday, increase in labor intensity, increase in labor productivity in the wage products sector, and introduction of a permanently reduced real wage for and acceptance by productive laborers all affect relative surplus value.

Karl Marx created the Value and Excess Value Theory (Kuhne 21). This idea contends that capitalism and exploitation go hand in hand. This theory also states that the value of the product produced through labor is greater as compared to the actual prices of labor in terms of the wages being paid out (Kuhne 15). This means that the exchange value of the product has to be higher than the use value.

The term ‘exchange value’ refers to the exchange equivalent in which the commodity being exchanged is compared to other commodities that are in the market while the ‘Use Value’ refers to the usefulness of a commodity (Kuhne 40). The theory of surplus – value is important in explaining the progress of economic analysis as well as the capitalist system.

It is also important in defining the reasons for its instability and stability. Generally; without this theory, it is difficult to understand how the Exchange and Use value Work (Kuhne 42). It also helps in understanding the flow of commodities; their values, cost of materials and revenue. Below is a discussion on some of the factors that shape/affect the relative surplus value.

Lengthening of the work day

Lengthening of the Work day has a positive impact in the sense that it leads to the production of relative surplus value (Kuhne 49). The Working day should never go more than 24 hours due to physical reasons. The maximum working hours depends on the workers involved. Lengthening of the Work day shapes relative surplus value in the sense that extra time leads to the production of extra products. In this case; an increase in the time allocated leads to more profits to the manufacturer.

It also leads to shortening of the Labour required. Shortening of the Work day is not an option for any Capitalist. It is only used in instances where there is a need to produce a definite number of commodities (This leads to absolute surplus value) (Kuhne 53). In case the Work days are shortened and the number of Laborers is not increased. The production of goods is likely to fall down since less goods will be produced. Their value will also fall since the commodities will be made in a haste.

Based on the scenario above; lengthening of the Work day leads to positive returns in the sense that the Workers are able to produce more commodities which leads to increased sales and profits (Kuhne 58). In reference to relative surplus value; Lengthening of the working day also leads to the reduction of workers. Relative surplus value cannot be achieved if the same numbers of laborers and time is maintained. There has to be some sort of imbalance. In most cases, employees are normally reduced so as to achieve surplus Labour time. A reduction in the number of workers leads to the production commodities that are of better quality. This is made possible because supervisors have an easy time in monitoring the progress of their laborers. In the end, the value/prices of the Commodities being made end up shooting.

Rise of labor productivity in the wage goods industry

A rise in labor productivity in the wage goods industry is also important in shaping relative surplus value. In this case; the productivity of laborers/employees is increased. For example, a laborer may be forced to produce 5 times as many commodities as he/she used to produce before. This makes them spend less time on each of the commodities they produce (Kuhne 58). The working day of the laborers may be increased to ensure there is maximum production of the commodities. In this case, if the laborers are made to produce 5 times more; there is likely to be a rise in labor productivity. This in turns shapes the relative surplus value as a result of an increase in the number of commodities produced.

A rise in labor productivity is important in shaping the relative surplus value because it contributes to a rise in the exchange value (Kuhne 64). As much as an increase in the number commodities is supposed to decrease the exchange value, a rise in labor productivity and the production of goods that are of high quality is supposed to shape relative surplus value since more goods/commodities will be sold.

This value will also be shaped since the wages of the reduced employees will be saved, which in turn creates a huge gap difference between the Exchange and use value (Kuhne 69). Generally; it is safe to say that a rise in labor productivity shapes relative surplus value since more commodities are produced; surplus time is added, the number of laborers and their wages are reduced. This can be interpreted in the sense that the value of a commodity increases depending on the time that was used to make it. The lesser the time the less expensive it is (Vice – versa).

Rise in intensity of the Labour

A rise in the intensity of labor is likely to shape the relative surplus value significantly. In this case, a rise in the intensity of the Labour refers to a proportion that is measured between the goods and services that are produced and the capital that is required (Kuhne 72). The higher the levels of labor the more the intense the Labour is. After reducing the real wages below a figure that is below average; the next step into achieving a relative surplus value is by increasing the intensity of the labor. In this case, commodities that have been produced with less Labour are cheaper as compared to commodities that are produced with intense Labour.

The more the Labour is intense; the more value the commodity has (Kuhne 75). Based on this scenario; a rise in the intensity of the Labour is likely to benefit the Employer the exchange value is much higher. Despite the fact that the ‘use value’ increases the ratio between this value and the exchange value cannot be compared. When the wages are cut from the Exchange value; the difference generated is considerable to the growth/expansion of the Business. It is also significant to the employer since they acquire huge chunks of profits. It is also important to note that intensity is important since

A rise in intensity also shapes the Surplus value in the sense that it leads to customer satisfaction (Kuhne 38). Laborers are able to fit/meet the changing levels of consumer demands. This means that laborers are able to provide/make products with a ‘Personal touch’. As a result of this flexibility; Laborers are able to make very many commodities. As mentioned above; most of this commodities are made using customer designed resources. This increases the value of the commodities. In most cases, customized products that are made using a ‘Personal touch’ are much expensive as compared to those that are made without any specifications (Kuhne 69). This affects the relative surplus value. Most of the commodities that are made as a result of intense Labour are very expensive. Only a small group of people in the society can be able to afford such goods/services/commodities.

A Permanently lowered real wage for and accepted by productive laborers

A relative surplus value can be achieved by offering the laborers with permanent Jobs (Kuhne 50). Most of the Laborers do not permanent jobs. Offering permanent jobs is one step achieving relative surplus value. Most of this Jobs have lower wages. The main reason behind lower wages is to ensure the employer does not experience any form of losses in case of instances where there are no jobs to offer.

Permanent jobs are allocated to the most productive employees (Kuhne 64). This helps to ensure that the goods/commodities/services produced are of high quality and value to the customers. As a result of minimal pressure, most of the permanent Laborers/employees end up making commodities that have a greater value. In the end, the value of this commodities replaces the old value. It creates a new one. This value is much more significant. In reference to this scenario; a relative surplus value is achieved.

Permanent low wage jobs for laborers helps in shaping the relative surplus value in the sense that a constant use value is achieved (Kuhne 79). The employers do not have to stress with the ever changing wages. Based on this scenario, a permanent job shapes the relative surplus value since the sales and profits can easily be predicted and calculated. In reference to on and off/seasonal jobs; one cannot be able to achieve relative surplus value. The main reason is because most of this jobs do not have constant wages and are dependent on the intensity of the jobs.

Works Cited

Kuhne, Karl. Economics and Marxism. Springer, 2015.

CONCLUSION

In Conclusion, it is important to note that there are two types of Surplus value (Absolute and Relative). Each value is different from the other. Absolute value is a value that is obtained after comparing the good/commodity/service with a standard that is absolute. On the other hand, a relative value is achieved after a close comparison with another arbitrary value.

All of the factors mentioned above play a role in shaping the relative surplus value. Each factor shapes the value positively or negatively. The ‘Exchange’ and ‘Use’ Value should never be the same. The Exchange value is supposed to be higher than the Use Value. In case the Use Value is higher, the operations of the Company are likely to fail since it will be operating on losses.