Cooking the Books 1

Labour power shortage

‘So what’s wrong with labour shortages driving up low wages?’ asked Larry Elliott, economics editor of the Guardian (29 August). Nothing, but it does bring out the commodity status of the human capacity to work, what Marx called ‘labour power’:

‘By labour-power or capacity for labour is to be understood the aggregate of those mental and physical capabilities existing in a human being, which he exercises whenever he produces a use-value of any description’ (Capital, Vol 1, ch. 6).

It’s the energy a human can expend on some work activity. Under capitalism it is something that is bought and sold, sold by workers and bought by employers.

It is sometimes said that what workers are selling is their ‘labour’. This can be passable as a shorthand for ‘labour power’ (as in ‘labour market’ or ‘labour shortage’) but can be seriously misleading insofar as it suggests that what workers are selling is the product of the exercise of their labour power; that they are being paid for their work and at its full value. But they’re not, because a part of their work, over and above the part corresponding to their wages, is provided free to their employer. In the case of those working for the government and its agencies (civil service, local government, health service, education) this saves their employer from having to spend so much. In the case of those working for an employer selling some product or service, it is something their employer converts into money as their profits, what in fact makes the capitalist economic system go round.

This is admitted by orthodox economists and national statisticians as they define ‘value added’ as the revenue generated in productive activity, not just wages but profits too. If workers were paid for the whole of the value added in production – and only human workers add it — there would be no profits. What they are being paid for is their labour-power, not their work.

This is why socialists are not being pedantic when we insist on drawing a distinction between ‘labour power’ (the capacity to work) and ‘labour’ (the outcome of working).

Generally speaking, workers receive the value of their labour power in that they are paid the value of what it costs them to produce and reproduce it, appropriately called the cost of ‘living’. As it is sold on a market, just like commodities the actual price paid for a particular kind of labour power varies with market conditions. When demand exceeds supply, the price goes up, the quicker if workers are organised to press for this. When supply exceeds demand, it goes down, though again if they are organised workers can prevent it falling as much as it might otherwise do.

The present shortage of lorry drivers, hospitality workers and social care staff is being called a side-effect of Brexit. Boris Johnson claimed, on 7 September in the House of Commons debate on paying for social care, that this was intentional. Wages in low-income occupations, he said, were going up ‘in exactly the way that those of us who campaigned for Brexit hoped’. Whether or not this was intended (and the financiers who funded the Brexit campaign would not have minded as this wouldn’t affect them), it has happened.

HGV drivers are benefitting – temporarily while more are trained – but many of the lowest paid will be no better off as the tax credits they are paid (the subsidy the government pays to low-wage employers) will go down.

There is, or rather should be, an elephant in the room: how come most humans are put in the position of having to sell their mental and physical energies to another group of humans?

One Reply to “Cooking the Books 1”

  1. Very good commentary on a perennial question. The payment of wages obscures capitalist exploitation and labor fakers promote that by negotiating the price of labor power.

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