Guido Baracchi December 1920
Source: "Reason in Revolt", Source documents of Australian Radicalism;
First Published: in The Proletarian Review, Editorial “Proletarian Comment” by the Editor (Guido Baracchi), December 1920;
Transcribed: by Chris Clayton.
ARISING out of the finding of the Basic Wage Commission are several matters which, viewed from the standpoint of Communism, are noteworthy. In the first place, the very concept of the basic wage affords striking confirmation of the Marxian theory of value. For in the face of the pundits’ of bourgeois economics solemn declaration that this theory has fallen down before the theory of marginal utility, it definitely rules out the determination of the value of the commodity labor-power by any standard of the utility of this commodity whatever; according to the concept of the basic wage, it is by what it costs to produce labor-power, not at all by what the expenditure of labor-power itself produces, that the value of this commodity must be determined. Thence it is but a single unavoidable step further to the full acceptance of the theory of the determination of the value of commodities by the quantity of labor socially necessary to produce them; in the case of the commodity labor-power, by the quantity of social labor requisite to produce the necessities of life for the worker and his family. This confirmation, by a concept put forward in the interests of the capitalist class, of the economics of that class’s deadliest enemy is an instructive instance of the working of the dialectics of capitalism. Instructive also is the manner in which the actual finding of the Basic Wage Commission has been received by Mr. Hughes and Mr. Storey respectively. The one, as the direct representative of the capitalist class, roundly declares that to pay a weekly wage of £5/16/- out of the present proceeds of industry is impossible. The other, as a “Labor” premier, cannot afford to speak so bluntly; he puts his unwillingness to endorse the findings of the Commission in more equivocal terms, contenting himself with the expression of his “doubts” about such a basic wage. This attitude of Mr. Storey’s is typical of the “Labor” Party in office, it gives away nothing deemed of real consequence by the capitalists; at the same time it is of great service to these in calming the indignation of the exploited workers whenever this waxes warmer than usual. Mr. Hughes and Mr. Storey both serve the capitalist class; in the fact that Mr. Storey serves this class more discreetly than Mr. Hughes lies their sole distinction.
WHEN the Melbourne “Argus” cries out that even the payment, as suggested by Mr. Piddington’s memorandum, of a weekly wage of £4, plus a tax of 10/9 per employee, would absorb the total sum available “for all other expenditure and profits,” it is far too modest about the dimensions of the surplus value accruing to the capitalists. In round figures, the Commonwealth Year Book gives the “value” of the output of Australian manufacturing industries in 1917 as £206 million, the value of the raw materials of these industries as £132 million, the wages and salaries paid as over £36 million. Subtracting the value of the raw materials from the total “value” of the product, we get £74 million as the value added to the raw materials by labor working upon them with machinery. Subtracting from this a further sum representing the value of the wear and tear of machinery, etc., we have left certainly well over £70 million as the value created by labor in the manufacturing industries in 1917. From this it would seem that the factory workers receive as wages about 50 per cent. of the value produced by them, and that about 50 per cent. surplus value is pocketed by the capitalists. Thus the rate of exploitation would seem to be about 100 per cent., and indeed, it is not to the interest of the capitalists that it should appear any higher. But mark well this. Marx has demonstrated that while all value (including surplus value) is created in the sphere of production, it is realised in the sphere of circulation; the surplus value is there realised piecemeal, and it is realised fully only when the product is finally sold to the consumer. The £206 million really represent, not the value of the product, but merely the price at which the manufacturers sell to the wholesale dealers, a price which is considerably below the product’s value. The 50 per cent., therefore, represents, not the total surplus value produced by the factory workers, but merely the share of his surplus value realised by the manufacturers upon the sale of the product to the wholesale dealers. A further share is realised by the wholesale dealers upon the sale of the product to the retailers; these in turn realise their share of the surplus value by selling to the consumers. Cahn, using 1904 American figures, calculates the middlemen␁s share of the surplus value created by the factory workers as 22 per cent. of the total value these workers produced. He calculates an additional 10 per cent. as direct tribute levied upon these workers in the form (net) rent. Omitting this altogether, and calculating the middlemen’s profits at a lower figure than Cahn, we get for Australia, not 50 per cent., but, at the lowest conceivable estimate, 70 per cent. surplus value pocketed by the capitalists. This gives about 235 per cent. as the rate of exploitation, a rate that leaves no room for doubt as to the capacity of industry to return the worker far more than £5/16/- a week — provided only he dare first to smash the predatory power of the exploiter.
BUT while they do not so dare, while the proletarian revolution has not destroyed root and branch the state power of the capitalists, the workers will get what is coming to them. And what is immediately coming to them is not the new-found basic wage, but rather no wage at all; not £5/16/- a week, but rather the bread-line. For the incurable contradictions of capitalist economy are about to manifest themselves once more in a commercial crisis pronounced by Mr. Lloyd George to be “inevitable” and “world-wide,” a crisis which, when its full effects are felt, may shake the world of capitalism to its foundations. This coming event has already cast its political shadow before, in the shape of an act of parliament which, while repealing the War Precautions Act in name, in fact proclaims the open dictatorship of the bourgeoisie. This act is upon the statute book, not for fun, but because the capitalist class is threatened with a revolutionary period. Although payment of the new basic wage involves, not the abolition of exploitation, but merely its standardisation, the capitalists have no intention of yielding the workers even this. Their refusal to do so will certainly add fuel to the already existing working-class discontent. This discontent may easily be fanned to a white flame by the widespread cessation of employment the commercial crisis will cause; hence the severely repressive nature of the War Precautions “Repeal” Act. Hence also the necessity for the new Communist Party to be up and doing, in order that the rising discontent may be turned to serve the highest interests of the proletariat. For in the coming crisis, even though it may not herald the immediate downfall of capitalism in Australia, lies a golden opportunity for the Communist Party, amid the deadly chaos of capitalist economy, to unmask to the workers the bourgeois state which is the last buttress of this chaos, to lead them towards throwing down this buttress, and to point them to the weapon of their final emancipation, the shining sword of proletarian dictatorship.
Modern industry ... compels society, under penalty of death, to replace the detail-worker of to-day, crippled by life-long repetition of one and the same trivial operation, and thus reduced to the mere fragment of a man, by the fully-developed individual, fit for a variety of labors, ready to face any change of production, and to whom the different social functions he performs are but so many modes of giving free scope to his own natural and acquired powers. — Marx.