Source: One section of Sakisaka's 1967 book of Shihon-ron nyumon (Introduction to Capital)
Translated: for marxists.org by Michael Schauerte;
CopyLeft: Creative Commons (Attribute & ShareAlike) marxists.org 2006.
As long as we are dealing with a class-divided society -- regardless of the historical era -- human labor-power is exploited; the only difference is the form this has taken.
The idle lives of a minority ruling class can only be maintained by products, needless to say. So the only method to bring about this state of affairs is to appropriate, gratis, the fruits of labor of those who work by the sweat of their brow.
We don't have to read the account of Sōgōro Sakura (1597-1645)  to know that the daimyo in Japan appropriated a yearly tribute; it is sufficient to merely consider the great number of peasant uprisings at the end of the Edo period (1603-1867).
Capitalism represents an historical era in which commodity production spans the entirety of society. Human labor-power is commodified. As a commodity, labor-power also has value. And a wage is received that is the price of this commodity. Because surplus-labor is exploited in the form of commodity production, surplus-labor takes the form of surplus-value. Capitalism is highly developed commodity production so the exploitation of surplus-labor likewise represents an extremely complex issue.
In the case of the exploitation of slave labor, by contrast, things are exceedingly clear. Slaves, who exist as a sort of animal owned by another human being, have no freedom. Like a dog, a slave is unable to exercise any degree of physical or mental freedom. The products of a slave's labor belong in their entirety to the slave owner. All that is received in return is food.
A peasant, meanwhile, is a sort of half-person. Firmly tied to the land, a peasant cannot choose what to grow or which land to grow it on, nor is he free to choose a profession. To the extent that peasants cultivate the plot of land they are provided, they are able to obtain food, clothing and lodging. But the fruit of their labor on the lord's fields entirely belong to this master. There is thus a clear, temporal division between the labor the peasants perform for themselves and that performed for the feudal lord. This makes it difficult to conceal the fact that labor is exploited.
And when, as subsequently occurs, some of the products from the land the peasants themselves cultivate must be paid as a tribute to this lord, in addition to their labor to cultivate the lord's fields, this also clearly presents itself as exploitation because it takes an in-kind form. Even though the yearly rice tribute was referred to in Japanese as goko-gomin (50 percent for master, 50 percent for peasant), this did not change the fact that the master's share was also the product of the peasant's labor.
Under capitalism, however, things are different. Labor-power is commodified and thus sold according to its value. The means of production are also purchased and owned by the capitalist class. Capitalists come into possession of the means of production and labor-power through the process of circulation, as well as the resulting products that likewise flow back to them via the circulation process to meet their needs. Even if everything is bought and sold at its value, capitalists are able to obtain the surplus-labor that forms surplus-value. What is the secret behind all of this?
Simply put, it can be explained with the following example.
A newspaper article -- I can't recall the exact year -- listed the capitalist Kōsuke Matsushita as the person in Japan with the largest income. I don't know anything about Mr. Matsushita personally, and just happened to see this article, but here I would like to use his case to illustrate exploitation. This example, incidentally, will assume that products and labor-power are sold at their value.
In the triangular diagram, A represents the value to replace the worn-out machinery and factories, which is deducted from the value of the products sold in the year. It is assumed, therefore, that this part is accumulated every year in order for production to continue at the same scale in the subsequent year. There is in fact one component of surplus-value included within this part, but here it will not be considered as such, and will be considered rather as the value of the constant capital from machinery, factories and the like within the value of the products.
Part B in the diagram represents the raw materials and supplementary materials, etc. which today also include gcomplex elements.h It also contains a part of surplus-value, but as for A we will set this aside, assuming that there are merely sufficient funds to continue production on the same scale the subsequent year.
In the case of C, we have the fund acquired from out this year's production for the labor wages that need to be expended for the following year's production.
Finally D is the assumed 500 million yen in personal income of Mr. Matsushita:
Everything here is posed in the simplest form possible. And the prevalent view of Mr. Matsushita as a capable man also suits our example.
A and B are constant capital, while C is variable capital.
The small black triangle on top of the horizontal line is the capitalist -- in this case, Kōsuke Matsushita. We will assume, simply, that his personal income is 500 million yen. The larger triangle below the horizontal line represents the entire labor of those who work for Matsushita electronics, their total labor-time, as well as the entire labor and labor-power of the means of production consumed in one year. This can also be thought of as the total products of Matsushita Electronics.
The total products of Matsushita Electronics are represented by the larger triangle. We are assuming that all of the products are sold at their value. The owner of all of the means of production is Mr. Matsushita. So all of the money from the sale of the products belongs to him. Because production has to continue, and the assumption here that production contains at the same scale, the machines and factories used up in production must to be replaced. For this replacement, every year a replacement fund, indicated as part A, is accumulated. It corresponds to one part of each year's sales and is deducted from the sale of the products.
Next, in order for production to continue, the raw materials for the following year must be secured. To secure this value, it must likewise be deducted from the sale of the products. And it is of course necessary to employ workers in order for production to be possible, so the labor wages for the following year must also be acquired. Again, this is taken from out of the total sales.
The 500 million that ultimately remains, after all of these deductions, goes into Mr. Matsushita's wallet. This comes, needless to say, from out of the total sales.
Reality is of course far more complex, but broadly speaking this is the situation.
The sums of money for each of the parts above are deducted from the sale of the total products of Matsushita Electronics. These are products that were created from the labor of the workers employed by the company. Not a single product could have been created without the labor of these workers.
Granted, for their labor workers make use of raw materials, machinery, and factories. They employ the means of production for their labor, as we have noted. The products of Matsushita Electronics could not be created without the use of these means of production, which are, moreover, highly advanced. Most of these means of production, needless to say, were not created by the labor of the Matsushita Electronics workers themselves. Still, workers in a factory somewhere produced them, using whatever machinery and raw materials were necessary. Apart from land, all of the means of production are things that are produced. And since land is not the product of labor, here we will set it aside as a factor.
The means of production are also the product of labor. However, they do not represent newly expended labor. Only workers labor anew and expend labor. Labor is newly expended in the creation of the products of Matsushita Electronics.
The company's machine-made electrical appliances can thus be said to contain the labor from the machinery, factories, raw materials, etc. which are used, and the labor newly expended by the workers. The larger triangle, as mentioned already, expresses both this old labor and the newly expended labor -- i.e. dead labor and living labor.
The dead labor is contained in the means of production, so it is merely transferred to the Matsushita Electronic products. This occurs gradually, in line with the wear and tear on the means of production, until the means of production can no longer be used as such, which also marks the end of this transfer of labor. All of the labor contained in the means of production can only be transferred; there is no way for what is contained in the means of production to be augmented.
Since the labor-power could be the labor of four, eight, or even twelve hours, the amount of labor expended can be augmented. The value of the labor-power is decided by the consumption goods necessary to maintain the life of the worker, making it possible for that person to exist as a human being who expends the same labor today as yesterday. In order to maintain labor-power, because a worker as a human being is not just flesh and blood but also requires the intellectual and cultural elements necessary for human life, goods produced must include products that satisfy a worker's cultural and entertainment needs, in addition to what is necessary to maintain the worker's physical state.
Let's take a look at the diagram again. The labor included in A and B cannot be augmented. However, because the 500 million in value emerges from out of the money from the sales, it had to have been generated somewhere along the way. The products of the entirety of the labor included in the triangular diagram constitute the money from the sales. This means that the 500 million in value is likewise the embodiment of human labor. Where, then, does the augmented part come from? The value of both A and B only has the capability of being transferred. The labor contained therein can only be transferred, and is unable to expend new labor.
But C, which is the capital expended on the labor wages, purchases labor-power. The worker is a living being and is able to perform the labor that forms the substance of value. The quantity of this newly created labor generates more new labor the longer it is exerted. If the worker were to only work for the amount that would cover his own wages, he would receive part C -- but Mr. Matsushita would end up not being able to pocket his 500 million in value. The 500 million is the product of human labor. And this is uncompensated labor that is squeezed out of the workers. It is only possible to realize this 500 million in value through the sale of products that contain this sum as the outcome of the workers laboring longer than the labor time included in their wages. The part of the value from the means of production worn out in the production (A and B) has already entered the value of the products, and it is then recovered from their sale.
What forms the 500 million is the crystallization of the sweat and blood of the workers. Anyone who doubts this should consider what would happen if Matsushita's workers were to cease their labor. All of the means of production (machinery, factories, raw materials, etc.) would rust and rot, and no value could be transferred to products at all. The means of production themselves would go to waste and return to nature, so the creation of the 500 would be unthinkable.
Marx uses the term surplus-value to refer to the value that the capitalist pockets without compensation. Thus surplus-value is the fruit of the exploitation of workers' labor. No class-divided society -- including slave-based or feudal societies -- can exist without exploiting the labor of those who live by the sweat of their brow. The social class that owns the means of production, or is able to freely dispose of them, which is to say the ruling class, cannot live without exploiting the labor of those who work.
The widespread view regarding Kōsuke Matsushita is that he is an upstanding individual. In capitalist society, however, no matter how upstanding a person may be, he cannot enrich himself without exploiting labor, which is to say expropriating the labor of many other people. There is simply no other way to be a capitalist.
In a survey of university students, one item asked them which person they most respected. The individual most frequently mentioned was Kōsuke Matsushita. Everyone, of course, is entitled to respect whomever he likes. But these university students are respecting a person who is not even aware of his own essence, and who considers himself to be a good person. Both the students, as well as the object of their respect, have overlooked the importance of human qualities. Many people who came before us have had to perish before people could become aware of themselves as human beings. This is something we can learn from Capital.
Once the means of production have become capital, a certain quantity of value is augmented through the exploitation of labor. And this valorizing value is capital. In a commodity-production society, labor-power also becomes a commodity, and production can be carried out by investing a certain amount of money in order to purchase labor-power and means of production, and then combining them. By doing this, the sum of money invested becomes valorizing value, thus becoming capital.
Marx refers to the value invested on the means of production as constant capital. The value of the means of production is merely transferred to the products. The value invested on labor-power is called variable capital. The expenditure of new labor creates value that exceeds the value of labor-power. This distinction between two types of capital is of great significance in Marx's Capital. This is a natural, logical conclusion from the labor theory of value. And it can be considered an indispensable distinction within the worldview of Marx. Nowhere within bourgeois economics, however, can this distinction be found.
1. A village chief who was forced to witness the beheading of his sons by the samurai lord Kozuke Hotta after protesting against unfair taxes.