How Can My Consumer Dollar Create a Cleaner Surplus Value and an Ethical Capitalist?
What You Need To Know About The Circulation of Your Capital.
Can you make a pair of jeans? A pair of sunglasses? What about a Viagra pill? Chances are you haven’t the slightest idea, and yet, somebody somewhere has told you that you can’t live without them. Our modern world and our western lifestyle is swarming with commodity products, the stuff that you can’t produce yourself, but you nevertheless believe you need. That means you’re going to have to buy it. In fact, the modern world divides us into groups based on commodity production, into those that can produce the goods we need – they own the means of production – and those that can’t, and must buy it off them. Unless you have the means to create an independent industry, there are going to be bits and pieces you must buy. Plenty of creativity, lots of resourcefulness, a community that reuses and trades, these greatly reduce your need to become a consumer, but a lot of the time, nevertheless, you’re going to have to be. And in our day and age, this does not necessarily have to be a bad thing. But for it to be a good thing, you have to understand the political economy you’re driving – as a consumer.
Don’t be mistaken you’re the only driver at the wheel, that’s lesson number one. The capitalist who owns the industry you buy from, he or she is driving too. In fact, you’re never going to stop fighting, the Capitalist and You, the Consumer, while the engine keeps churning, just who precisely has control of that wheel. Two drivers, yes. That’s important. That’s what Marx called Material Dialectics.
The Commodity
Yes, that’s right, I said Marx. Trust me, when it comes to understanding capitalism, predicting its social organization, its progress and outcomes for humanity, particularly in light of the last few years, dead or alive, Marx is about the last man standing. It’s high time we in the west got over our fears of socialist revolution and discussed Marx’s ideas about Capital.
Only if we understand those mechanics of the circulation of Capital will we be able to approach our role in the marketplace in a savvy, perhaps even ethical way.
So let’s start briefly with why we’re here, in the market. That commodity. This is the gap in your creativity. What you don’t have the resources or time to make yourself, but you still have a desire for, and therefore have to buy off the capitalist. S/he – on the other hand – has perceived your need and has gone into business producing it on your behalf, having done the research that there’s more than one of you out there.
You need one of them, but the Capitalist tries to make and sell enough of them to keep in business AND make a profit, in order to have a good life. The PRICE has to be right to keep that fine balance of both consumer and capitalist happily facing off at the cash register. One has to get enough consumers buying to pay for the production costs – the Labor Power it takes – to produce it continually, for the mass market each consumer collectively creates.
Labor Power
Now when I speak of Labor Power I’m talking about a customer service representative, a store manager, a distribution agent, a courier service provider, a manufacturer, production floor workers, a design team, not to mention all the suppliers, bank managers, insurance agents, copyright and intellectual property lawyers, oh and don’t forget market manager, website engineer and designer…My goodness, how on earth can a consumer’s dollar go that far? But there’s more to Labor Power than this: There’s the fixed capital of all those industries also. A lot of machines go into every product’s and service’s quality production and delivery, distribution and display and packaging, marketing and resource management. Whenever a machine is involved in production, that’s productivity that has been taken away from human capacity via that grand historical occasion, the Industrial Revolution. It’s important to carry on, if you can, thinking of it in terms of Labor Power all the same, because Labor is as much a currency of Capital as Money is. In fact, Labor is Capital’s qualitative value that Money attempts to quantify.
Qualifying Value for Money.
So how can we know that RIGHT PRICE that will sell enough of the product, to pay for all of its inherent Labor Power and fixed capital? A capitalist has to start thinking not in terms of an equivalence of the product’s use-value and price. Even while s/he depends on you, the consumer, to keep thinking precisely in this way. For the capitalist, the use-value of all that Labor Power and capital expenditure is for an ongoing production of hundreds and thousands of units of your commodity. But for you, the consumer, the use-value of your one item should be the equivalent to your idea of a fair price.
For the consumer the use-value of a commodity is compared in an instant to an evaluation of the “fairness” of its price. So exchange-value is assumed to equate to use-value, even while it goes without saying use-value is qualitative, while exchange-value is quantitative, the two can’t really equate. Consumers either remain conscious of this contradiction of the circulation of capital, and do some pretty hefty math in instants as they check price tags, or they do what is hoped, and forget about it. They go by the “common sense” of fair prices in the marketplace of the moment. Either of these practices is what is usually understood as “smart shopping”.
Smart Shopping
Any discernment of what constitutes a fair price takes shopping around and looking at a broad comparison of prices. This is considered “smart shopping”, but in fact it only enables you to forget the contradiction and go more ably by the illusion of equivalence. The more you figure out what’s “fair” in the marketplace, the more you are subscribed to a medium of currency that fluctuates and changes not according to your shopping interests at all, but to the capitalist’s.
This is how the capitalist gets to be ahead of you in the marketplace, and you can sense it, can’t you? We all end up just a little uncomfortably Marxist the longer we live as consumers shopping around and looking suspiciously at those selling us goods. The capitalist has long departed from that equivalence assumption. Use-value determines your need or demand, and therefore the enterprise of the capitalist, and is the basis of a social relation between us, not an economic one.
How the capitalist goes about determining his or her price – the commodity’s exchange-value – has to do with a magic trick of capital, and the less you know about those magician’s tricks, the more the capitalist can control what “appears” to be the “fair” price out there. “Fairness” is an appearance with very real consequences not just for you the consumer, but for the workers producing the commodities you buy. The magic trick most capitalists usually perform relies on segregating you two groups from one another.
We’re getting down to the nitty gritty of the political nature of our economy, what gets abbreviated to “political economy” because you have groups separated by their access to and circulation of capital, giving them more or less power in the marketplace.
I’m going to stick with my pricing method to explain this.
The Profit Margin
The capitalist has to keep looking as closely as s/he can – continuously – to the gap s/he’s filling: the product’s SALES. This way s/he makes the best estimate of FUTURE SALES. If that production value can be projected correctly, the capitalist can tell how much Labor-power will be needed. That’s the simple part.
THEN, all the capitalist usually has to do is organize the Labor-power in as efficient a way as possible in order to generate – abracadabra, POOF! – SURPLUS VALUE.
How is this done?
Marx’s critique of capitalism was all to do with this part: he not only discovered surplus value, but he discovered the political shenanigans it took for the magicians of capital to produce it within their regular means of production. And as usual, the magicians of capital simply used tricks and illusions, a game of appearances to keep the consumer audience fooled while they exploited their assistants. All the capitalist usually had to do was make sure the costs of the Labor-power were LESS – in the end – to the cumulative sales.
Wages
The “fair price” discussion cannot in fact start with a look at your commodity for sale at all: it starts with the “fair price” fixed to the Labor Power it took to produce it. In capitalist terms, that Labor Power has to become a currency for its use-value – in socially qualitative terms – to become its exchange-value, in monetary terms of equivalence. Labor Power becomes a currency, indeed, through TIME.
Now what is real and what is abstract? The real value of anyone’s Labor is to do with what it is, what it means, how it defines someone in terms of their skills and background, right? To measure it’s worth in terms of time units in an ongoing capacity is to abstract that social worth of a person, their “essence” as Marx liked to call it – to a rate of exchange, negotiable for sure, but nevertheless a materialization of that worth. Now if it is made material, surely it is made more real? Marx said NO! Economists and defenders of capitalism usually say Yes!
What do you say? And what does a capitalist that also wants to be ethical say? We get stuck, contemplating this on behalf of the workers, the ethical capitalist is expected to take on the burden, on behalf of their customers.
Work Is the Essence of Life
Anyone lucky enough to go to work every day with nothing but love for what they do, might indeed be able to forget this abstraction of their Labor Power. But most people on a line of production of commodities, wake up every day having to do it for the paycheck. Some day, whether or not you love what you do, you’re gonna wake up with that feeling of only doing it for the money. Your paycheck better stand up to that challenge.
But beyond this moment, how many of us have really thought about the profit margin our paycheck is producing for our employers? In terms of it being an abstraction of the essential quality of life, even if we ourselves have been fully socialized to measure it simply in units of time, can we really afford to let our employers away with this confusion of our reality, for their gain and not ours?
The principle makes us all capitalists, selling our very souls for a monetary equivalent in the market place. When we then go back into the marketplace as consumers of products, we’re already sucked into a whole division of Labor and circulation of capitals, where our profit margin for the Labor we sold for one price is the higher class of consumer practices we can afford compared to those that sold their Labor-power at a lower exchange value.
The Politics of Pricing.
Now let’s go back to our commodity and do our smart shopping for our chosen commodity. A survey of the range of prices in the market are anywhere between these amounts, ooh let’s say $10 and $1000. So when you look at products at the low end of the value scale you should be able to assume a capitalist production of very generic standard, producing in the zillions for the masses around the world. But for there to be any profit at all in this product, you have to realize the wages of the workers involved would be minimal, very likely unfair.
Then when you look at the high end of the spectrum you should expect some rarity or difficulty within the production process, very few products ending up actually in circulation out in the marketplace, and possibly a specialized Labor that costs more by the hour.
That’s assuming you haven’t simply stumbled across the most corrupt type of capitalism, where “rarity” is being simply branded, while a production process nevertheless stays as generic and pays the same rate of Labor Power as the first place.
There are commodities out there with the high price-tag that nevertheless cost only the equivalent of the lower to produce. So that capitalist guns for a massive profit through a sheer manipulation of you – the consumer – in the marketplace.
And this has to date been the whole point of the capitalist, to abracadabra, POOF! Generate as much surplus value between production costs and market exchange value as possible. This is literally what has been believed in the West to be the model of good capitalism. (And you thought Marx was the bad guy!)
Who Needs Revolution?
It’s a fundamentally unethical principle of the economy we’re in. So Marx believed it would eventually be overthrown. He assumed that there would always be
ONLY the kind of workers desperate or dumb enough to undersell themselves to the point of alienation and thence revolution…
ONLY the kind of capitalists corrupted by their greed for profit that they eventually drove workers to revolt and…
ONLY the kind of customer who would never appreciate their juggling act in the marketplace, of this dialectical situation that essentially makes of their own economic condition a contradiction whenever they move from their work environment to do their shopping.
But Marx never accounted for ethics WITHIN the capitalist enterprise – and perhaps this is because he never foresaw in his age the ramifications of environmental concern that has fore-grounded our economy, has driven sustainability – as a principle – into the political economic equation.
Social Evolution?
You now have workers who are smart enough to negotiate a varied Labor Power at costs that match their own lifestyle needs. AND – they are ready to pressure their employers to move in the sustainable direction.
But this is NOTHING compared to the fact that…
You now have capitalists who care enough to meet that negotiation with their employees with integrity – pay them what they’re worth and search for alternative means to generate that surplus value (it’s still an integral bottom line imperative of staying in business)
But above all, what Marx least of all expected…
You now have consumers who finally comprehend the dialectics inherent in the commodities they buy and sell. They shop with more on their minds than a simple – and ultimately bogus – equation of “fair price”. They consider the Labor Power, and the difference to their own Labor Power that is inherent in the products they shop for. They consider the political economy, they search for the means, such as this article, to know more and more about it.
And ultimately, they’re increasingly ready to comprehend, appreciate and thus determine the “surplus value” inherent in sustainable production, over and above their traditional – and manipulated – search for a fair price.
Sustainable Surplus Value
Your consumption over the counter juggles a global political economy, full of social relations of inherent inequality and abstract constructions of equivalence. Your money is part of a circulation of capital that continuously creates surplus for the owners of the means of commodity production. So who do you want to pass your profit margin onto?
The more you know about the production of the commodities you buy, the more you might perceive how ethically the profit derived from the price you pay has been created. Shop for commodities that can be afforded by the workers who produced it. THEN you know you are buying from a socially responsible capitalist. Shop for commodities produced where you are near the production process, and can see and talk to the workers, or where the owners of the means of production are ALSO the workers.
Profit is not a necessary evil: profit is an absolute of commodity production. If you have to enter the market for something you cannot produce yourself, then accept that your money creates profit and wages for those in commodity production, and simply search for capitalist enterprises where profit is achieved ethically.
A sustainable capitalist enterprise must be one where the social responsibility toward the commodity’s Labor Power is recognized. This is the often overlooked third bottom line within the triple bottom line policies of sustainable or green businesses. Take another look beyond the green wash of a company’s market campaign. (Remember, marketing is afforded by companies who can generate enough surplus value to pay for it – you have to be suspicious of anyone who can afford billboards all over a city, even if their messages are all about their low carbon footprint!)
For the consumer, a capitalist who accounts for their social responsibility will often have to charge you more over the counter. PAY IT! Pay it and change the world WITHOUT it having to resort to revolution and communism. Who needs that?
