Showing posts with label poverty. Show all posts
Showing posts with label poverty. Show all posts

Wednesday, March 28, 2012

Commodity Driven Economy?


In this paper I have focused on the position of labour in relation to commodities, matter and use-value. And it is in this relationship that we will find what Marx perceives the value of labour to be. I will also highlight the difference between what Marx believes an aimless expenditure of labour would be, and in doing so discuss the disjuncture present in South Africa in a commodity driven economy.
So let us dissect the terms. Firstly: Commodities. Commodities for Marx are constituted as commodities if they have either a) value or b) use value. Use value being the objects propensity to be useful. The qualities that Marx attributes to the use value of commodities are as follows.

11)      They are independent from the labour which produced them
22)      The use value of a commodity is only realised in its consumption
33)      It constitutes the substance of all wealth. Wealth being a societal construct. (What I believe this to mean is that the more useful a commodity is within a given society the more it is worth. For example a can opener in a society with no cans has no value, where as a can opener on an island full of canned food and no rocks would be an object of extreme use-value)
44)      The use value of a commodity is the material depository of exchange value

Now, how does labour relate to commodities? According to Marx if the same amount of work or labour time goes into the making of a product, then those products are of equal value. But value must also be measured in relation to quantity. The value of a commodity decreases as the quantity increases.  But increases as the quality and the amount of labour time that go into the commodity increase.  So we can see that more labour per commodity equals more valuable commodities, and conversely less labour per commodity equals less valuable commodities, in relation to quality and quantity.

In order for labour to create a commodity it must be introduced into productive labour in which it works with earthly matter in order to transform that matter into a commodity.  But in a capitalist society the labourer does not own the means of production necessary to produce commodities and so he must sell his labour power to a capitalist who owns the necessary equipment. In doing this the labourer exchanges his labour for money. The labourer must do this because wealth in a capitalist society is constituted by use-value, which is embodied in commodities.  He cannot purely do the amount of labour necessary to survive because the capitalist must create surplus value off of the commodities which he the labourer creates, but does not own. In order to create this surplus value the capitalist takes the production of commodities and reduces them to the effort of a group of labourers as opposed to a single individual. So if you look at a production line on a film set, take Labyrinth for example in which a mid-evil village is created out of poly euro thane. The set starts with the poly euro thane being set in moulds of brick walls. The moulded slabs which emerged must then be scrubbed, after scrubbing they are coated with coprox, and taken outside to dry. Once dry the base layers of paint are applied, and once again taken out to dry. Once dry they slabs are all taken to the set where they are constructed by the fabricators. After fabrication is complete another round of painting is done in order to accomplish the finished product. Each of these processes requires individuals to do specific tasks in order to create the greater commodity. So instead of producing one actual commodity each the necessary labours are divided. Because of this division and removal of the individual labourer from the commodity, the film set, the capitalist can make surplus value off his commodity because the value of it is related to labour power expended. But this, the labour power, is calculated amongst a group and not an individual. Surplus value is then further increased through extended working hours, and worker productivity.

So we can now see the relation of the value of labour to commodity under a capitalist system. It is clearly an exploitative one, in which the value of the labourer is degraded in the process of making surplus capital. It is a situation in which the labourer has very little control of his work hours and pay rate. But is forced into labour for he has no common land on which to survive with just simple modes of production like sustainable farming.

With this brief introduction to Marx’s theory of labour I would like to draw your attention to the difference between labour and the expenditure of labour power. Labour according to Marx is productive activity with an aim, whereas expenditure of labour power is productive activity without an aim. This baffles me slightly. What sort of expenditure of labour power does not have an aim? My guess is that because we are talking about a capitalist system the aim of the process of labour would be the production of commodity. This, I believe, is a terrible aim, probably worse than the Socratic drive for truth via logic. For this aim shifts the whole structure of society into a commodity driven economy. While it is true that commodities are a necessary part of an economy, the aim of a society should not be to produce commodities, but to ensure that people have the necessary commodities in order to live. As we can see in our South African society we have a surplus of wasted commodities, and a large rate of poverty and unemployment. The question I will pose you is how can this disjuncture be eradicated? 

The Market Universe of Doom


There is no doubt that there is wealth in South Africa, and conversely there is no doubt that there is poverty. And in between this wealth and poverty there is mass unemployment that is slowly decreasing according to the Quarterly Labour Force Survey in South Africa October to December 2011, even though it is still sitting at 23.9%, that is roughly 4244000 unemployed people out of a population of 32670000 people between the ages of 15 and 64. The most trouble lies in youth unemployment with the unemployment rate being 51% among 15 to 25 year olds (Jones: 2011). The question then is where is the money going? Why is it not being invested into business – which would create employment? Why are there no jobs for the youth of South Africa?
The truth of the matter is the world has changed - not only in the technological shift where unskilled labour is becoming less of a commodity because of the mechanical take-over - if Benjamin Lee and Edward LiPuma are correct, another change occurred in 1973 – the year which marked the end of the Bretton Woods agreement and of the gold standard. The old model has been undermined and a new model has taken its place while the rest of the world seems unable to keep up with the change. The economy no longer drives the market, it is now the market which drives the economy. (Benjamin and LiPuma 2002: 203-205)
Model one: Marx. In a very simplistic explanation of Marx’s model productive labour was the basis of an expanding economy. Labour itself was a commodity, and a necessary part of the production of commodities. The key was to drive the cost of labour down in order to create surplus capital off of the selling of commodities. (Benjamin and LiPuma 2002: 203)
Model two:  Derivatives. And here things get murky for I am delving into the realms of the market. A place I have no authority on. Derivatives are defined as “financial instruments that derive their monetary value from other assets, such as stocks, bonds, commodities, or currencies.” (Benjamin and LiPuma 2002:204) What a derivative does is it gives individuals the opportunity to sell certain assets at a specified date. I shall use the example that Lee and LiPuma use: “One might purchase a call option for $500 to buy one hundred shares of IBM at some future date for $100 a share  - the strike price. If at that future date IBM shares were valued at $120, the buyer would realise a profit ..” (Benjamin and LiPuma 2002:204) The process is far more complicated than this, but as you can see it seems as if profit or capital is being made from nothing. An abstract instrument which “circulates in its own universe”. (Benjamin and LiPuma 2002:204)
So now we can see the shift, capital is no longer solely created by productive labour, as the capital that was initially made off of the old model is now circulating in the market which has its own means of capital expansion (although Marx did predict this shift). There is no longer a need for those with monies to invest in productive labour, and when they do it is invested in bigger developing economies. The exploitation of labour now seems to be the in which newbie entrepreneurs can use in order to gain access into the new model. 
Where does that leave the masses of the unemployed youth? In yet another mode of estrangement, for without money they cannot enter into the new model of money for mahala in the market. And those in the market seem to be living in a different universe with minimal plans for the upliftment of the impoverished. Perhaps the time is coming where these two worlds will have to sever ties in order for the former to survive on their own terms without the influence of a greed driven economy on their minds. It is already happening in some parts of the world – as some are calling it “The Fourth World War.” And perhaps this is where a new imagining of the future could occur, outside of the system in developing a sustainable area – in terms of shelter and food supply - outside of governmental rule. Is it a better option than waiting around for the government to do something, or for the world to change?
The second option would be to look at Brazil’s rapidly increasing economy in 2010 due to their focus on agriculture and resources - with a current growth rate of 8.4% in their agricultural sphere. (Fick 2012) Although The Economist doubted the likelihood of the continuation of this boom which has now slowed down because of Brazil’s tendencies to save too much, invest too little, and spend dubiously to keep growth up, as well as their need for more skilled labour. (The Economist 2010) There is still room for learning from this example in the case of South Africa and other African nations when it comes to looking at how to re-involve the youth within the working sphere.
References
·         Fick, Jeff. March 2012. 2nd Update: Brazils’s Weak Industry Slows Once Booming Economy. http://online.wsj.com/article/BT-CO-20120306-708430.html
·         Jones, Michelle. 2011. Half of SA’s Youth are Unemployed. http://www.iol.co.za/news/south-africa/half-of-sa-s-youth-are-unemployed-1.1019783
·         Lee, Benjamin and Edward LiPuma. 2002. “Cultures of Circulation: The Imaginations of Modernity.” Public Culture 14(1):191-213
·         Quarterly Labour Force Survey, Quarter 4 2011, www.statssa.gov.za
·         The Economist. May 2010. Brazil’s Booming Economy: Flying Too High For Safety. http://www.economist.com/node/16167612