Question

(History of Economic Thought) Question.

2) (a) What is the difference between labor and labor power according to Marx? (b) Explain what Marx means by surplus value and how he uses the difference between labor and labor power to explain surplus value and exploitation.

Answer 1

Answer 2.

a. Labour power is the capacity of “labour”. In Marx’s terms, labour was the physical form of activity or work while, labour power is the ability or capacity to do the work. Marx puts labour and labour power as two things. He explains that labour is not nothing but just an activity (labouring activity) and it has no value attached to it. It is the labour power that has a value. And, labour power is something that is exercised through labouring. In other words, Marx claimed that people do not exchange activity for wages, they rather exchange power or their ability to perform such activities (labour power) for exchange. Thus, Labour are the sellers of their labour power.

b. The value of the commodity that the labour create is greater than the value of his labour-power. Thus, a capitalist is able to sell the commodity at higher value than the value it pays to the sellers of labour-power. This difference in the value is the surplus value. In other words, it is the unpaid value of labour power. Marx says that ratio of surplus value to the value of labour power is the rate of exploitation. This is because the value that labour receives for their labour power are less the value they create. Hence, he points out the exploitative nature of the capitalists.