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V. Grey

Shop Talks on Socialism

The Parent Without a Child

(1 June 1946)

From The Militant, Vol. X No. 22, 1 June 1946, p. 6.
Transcribed & marked up by Einde O’ Callaghan for the Encyclopaedia of Trotskyism On-Line (ETOL).

Suppose I have a million dollars and I want it to “make money” for me, as they say money does. Will it grow bigger if I put it in a hole in the ground and cover it up with dirt? No, I must invest it. If I don’t want the trouble of deciding what to “invest” it in, I can put it in a savings bank – let them invest it tor me, and the law will guarantee me an income on which I can live beautifully without touching the million.

What magic does this million have, to act like that? What does it do to yield up this new fortune every year? It is more than human, apparently. For it creates new life without ever dying itself.

Let us follow this million dollars around in its “investment”: A large building is bought for 50 thousand dollars. Forty machines at an average cost of 15 thousand dollars are bought for 600 thousand – lathes, planers, shapers, boring-mills, etc. Throughout the year 250 thousand dollars’ worth of steel bars, shafts, castings, etc., are bought from other capitalists to serve as the raw material for these machines.

There is 900 thousand of the million accounted for. Will it “make money”? By all the laws of logic, it should make nine-tenths as much as a million. But will it? Suppose I let those things all stand there for a year. At the end of the year how much would I make?

Well, the building would probably still sell for 50 thousand dollars. My 40 machines, if they had been soaked in oil, might still sell for 600 thousand, but most likely I would take a loss on them. The same applies to my 250 thousand worth of raw materials.

So here is 900 thousand of my million that is very stubborn and singularly inept about this business of creating new values out of itself. The machines stand next to the raw materials like so many male and female mules. They have a lot of latent power but they cannot generate anything new. No matter how long these things associate with each other, nothing new is created. And no new value appears.

But if 40 workers are hired to put the raw material in the machines, operate and guide the work, at the end of the year. Instead of rough castings there will be fine machined products, smooth close-tolerance shafts, etc. These will be a new creation. And they will represent a greater value than before. They are new things and new values.

New Value Has Been Added

They have the old value of 250 thousand that was given them by the previous labor worked up in them in the steel plants and foundries. Now they have a new value added to the old – the labor worked up in them by the machinists. Now they are sold for 450 thousand instead of 250 thousand dollars. That is a new value of 200 thousand dollars added by the machinists during the year.

Now if each of these machinists has been paid 50 dollars a week it will cost me just about 100 thousand dollars for the year. This, you will remember, was the tenth part of my million. If there is any magic about my million it is that tenth that is paid for labor. Because the labor added 200 thousand in value to the product, and I only paid the laborers 100 thousand. So my million has at last given birth to a little image of itself. It has apparently presented me with a 100 thousand dollar profit.

Here is the real problem, and also the real clue to the source of profits; the labor of other people that is worked up in the capitalist’s product – and the wages paid for that labor.

Products are bought and sold all the time by the capitalists among themselves. They are sold according to how much labor is incorporated in them. But after a capitalist has bought products that represent a certain amount of labor, he must add some more labor to them in order to sell them for more than he bought them for.

To make a profit he must always be sure to pay the worker less values than the worker produces – or adds to the product. But how does the capitalist get away with this?

(Next week: Labor and Labor Power)

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