The GNP and you

By Sam Marcy (May 27, 1993)

The following article is based on notes for a recent talk Sam Marcy gave that may be useful for classes on Marxist economics.

Most workers would be amazed to know how much wealth they are creating. You would be too if you seriously consider the statistics on wealth produced in the United States.

For instance, according to the World Almanac, in 1991 the gross national product was $5.6 trillion.

Most of us have never handled more than a couple of hundred dollar bills, even if we have a few thousand in a savings account. So it is difficult to even consider a trillion dollars. But you know what a million is. Well, it takes one thousand millions to make up one billion. Most of us can scarcely imagine so much. And it takes one thousand of these billions to make a trillion!

Just to put it graphically, supposing that a stack of bills equal to a million dollars were one mile high. A trillion dollars would be a million miles high!

Consider how small your savings, if you have any, are by comparison.

Yet it is the labor of the workers in the U.S. that makes up this gross national product of nearly $6 trillion.

It is certainly more than enough to feed, clothe, house and provide all the necessary comforts of life for every woman, man and child in this country. In fact, if divided by the population of 100 million workers in the U.S., it comes to $56,000 apiece of wealth created in just one year.

What's the problem?

So the capacity to produce is not the problem in this country. What is the problem?

First, let's examine the term gross national product. It's a misnomer because it doesn't tell everything about itself.

Any product must satisfy a human need, whether it be guns or butter or whatever. However, I may work in the house and fix a chair or bake a cake or do any of hundreds of things that serve human needs. You may do the same. You may grow vegetables in your backyard or sweep the stoop or wash your car.

All this is human labor satisfying a need. But it is not part of the gross national product. It is not counted by the U.S. government as part of the GNP.

Why not? Because the gross national product is not the sum of all those things that serve human need. It is the sum of only those things and services that are produced for sale.

In the first few sentences of his monumental work Capital, Karl Marx explained the difference between a thing produced only for use and something produced for exchange — a commodity. Our so-called free enterprise system is a commodity-producing economy. Except for the things we produce for ourselves that are not for sale, everything else is produced for the market.

If Marx were to consider the GNP of the U.S., he would subtract the service part and reduce it to an aggregate of commodities. Then he would show that each commodity has two characteristics: First, it satisfies a human need, and second, it is meant to be exchanged with other commodities, or sold on the market. It must be marketable.

In contemporary society, commodities are generally exchanged for money.

Productivity is not enough

One thing is incontestable: the capacity of the U.S. productive system to grow and grow. It seems to expand endlessly, until interrupted by economic recessions, some of them devastating. Then, as it recovers, it becomes more productive and continues to expand.

When the capitalists describe their system, it sounds so idyllic. Production keeps growing and more and more good things are turned out all the time.

So why is there more and more endemic unemployment? Why is there permanent homelessness — and all the other ills that come from not having a job?

Because something extremely important is left out in such an exposition of the growth of capitalist industry. It is this: While production expands, the labor time contained in each product declines.

What fundamentally causes this? It is the constant, incessant introduction of labor-saving devices at such a rate that production reaches dizzying heights of efficiency. Higher and more sophisticated technology is constantly introduced, replacing workers by the millions.

Many years ago, Stuart Chase in his book Men and Machines explained this process in vivid language. Long ago, some unenlightened elements in the English working class, the Luddites, thought the fault lay in the machines. So they urged a campaign to break them up. But it is not the machines themselves; the men and women who own the machines are at the bottom of the problem.

It is to Karl Marx's great merit that he uncovered the laws that really govern capitalist production, while the capitalist economists prettify and cover up the contradictions that rule the capitalist economy.

The capitalist economists all begin with the assertion that the capitalist system is eternal, has existed for all time, and will continue forever. Marx, however, began with an historical analysis showing that capitalism evolved from an earlier system, feudalism. Feudalism itself arose after the collapse of chattel slavery, at least in Europe.

Marx showed that the dynamic growth of the productive forces elevated capitalist society above the previous systems. At the same time, by introducing wage slavery as against serfdom and chattel slavery, the capitalists laid the objective basis for the workers to be able to take over the production system and put it on a new basis.

What basis? Marx showed that labor under capitalism is collective. There are billions of units of labor power of all kinds — carpenters, nurses, accountants, sailors, clerks, etc. When looked at cumulatively — even when viewed imperfectly as in the gross national product — all the different varieties of labor can be reduced to abstract labor. It is plain that capitalist development is made possible on the basis of collective labor.

Collective production in the U.S. is so vast that the result is a GNP in the trillions of dollars. This is an enormous difference from earlier forms of production. It also lays the basis for the socialization of production, not merely in organization but in ownership as well.

Driving toward doom

The bourgeois economists want to leave out of their analysis virtually everything that points to the collapse of capitalism. So they fail to point out that the insatiable drive of competing capitalists to introduce labor-saving devices prepares their doom; it leads to the constant growth of unemployment to the point that it becomes an insurmountable problem for even the richest capitalist governments.

Bourgeois politicians like Bill Clinton talk constantly about stimulating the economy, as do his counterparts in Germany, Japan, Britain, France and so on. But the solution does not lie in greater production.

Greater production under capitalism means keener and more deadly competition. Competition is unavoidable under capitalist society. Even where monopolies become most powerful, virtually omnipotent, there is competition within them. Even the most monopolized industries, such as communications, are rushing to install more and more labor-saving devices, which in turn inevitably leads to a reduction in labor time.

This increases the pool of unemployed workers. Even if the government is pushed to subsidize the jobless, or if the workers force the employers to pay them full time during layoffs, it reduces the amount of profit. This in turn forces more savage competition among the capitalists. As a result, some sink into insolvency, which leads to a universal capitalist crisis of the type that prevailed in the early 1930s.

No magic of the market

Capitalist economists tell us that the market is magical, that it creates profit and loss. While huge fortunes are made and unmade in the market, especially the stock market, their premise is wrong. The stock market is where profits are distributed, not created.

Profit is created only in the production process as a result of workers' labor. Of all the commodities on the market that are exchanged for each other, there is only one with the peculiarity of creating profit. The others are exchanged for equal value. The peculiar commodity is labor power — it alone creates more value than the employer ever pays for it.

Were the laborer to be paid a sum equivalent to the value that his or her labor creates, there would be no basis for the bosses to employ it. Marx discovered the secret that the capitalist economists covered up: Labor power creates a value above and beyond its exchange value.

Marx called this surplus value. It constitutes the profit for the employer.

Every ruling class has always appropriated the labor of others. Marx didn't discover this. The slave owners only allowed the slaves to keep a bare minimum for their subsistence and took anything they produced above that. There would have been no ruling class in ancient society if the slaves couldn't produce a surplus. With variations, this also happened in feudal society.

But capitalist economists refuse to acknowledge that the surplus over and above what has been necessary to preserve the work force — in slavery, feudalism and capitalism — drives the development of all these societies.

Income distribution not basic

Liberals say that the problem in contemporary society lies in the big income gap between rich and poor. It is grossly unequal. Those in the top fifth own so much more than those at the bottom. According to the bourgeois liberals, the solution is to trim down the peaks and fill in the valleys.

But this is fallacious. It doesn't deal with the real problem. It cannot resolve the crisis.

The problem doesn't lie in the distribution of the national income, grossly unequal though that may be. The real injustice lies in the private ownership of the means of production.

Each worker's contribution is but one unit among millions of units of collective, generalized labor. It is undeniable that labor is collective. Why then is the appropriation of it based on individual ownership?

The collision between the growth of the productive forces — which today more than ever are characterized by the organized, collective labor of the workers — and the individual ownership of the means of production can only lead to a collapse on the scale of what happened in the 1930s. Marx showed that catastrophes such as the one that occurred following the October 1929 stock market crash are absolutely inevitable under capitalism.

When millions are out of work, artificial stimulants such as government jobs programs merely delay or mitigate the problem. Most often, they drive the disease deeper into the organism of capitalist society.

The only way this basic contradiction of capitalist society can be resolved is through the revolutionary transfer of the ownership of the means of production into the collective hands of the working class.





Last updated: 15 January 2018