Reply to Wolff on Class

Robert Pollin

Rick Wolff's article in the May-June issue of Dollars & Sense offers a clear, brief, and useful summary of Wolff's views of Marxian economics and class, as developed over many years with his collaborator Stephen Resnick. Their view is by no means representative of what one finds by reading the work of Karl Marx himself. This in itself is not necessarily a problem. Marx was an enormously creative and challenging thinker, and it can be beneficial when people attempt to simplify and summarize Marx in their own ways. But it is fair to ask whether Wolff's and Resnick's analysis succeeds in capturing important insights about economic reality and whether it can serve as a tool for empowering democratic and egalitarian movements—a standard Wolff invokes when he writes that "Marx developed a new class analysis to equip mass movements with new insights and strategies for constructing egalitarian and democratic societies."

There is no doubt that Wolff, along with Resnick, has made substantial efforts to develop a new Marxian analytic framework. However, I do not think that their analysis offers a viable framework for understanding economic reality; rather, I think that their approach contributes towards pushing progressives away from confronting major fundamental problems of contemporary capitalist societies.

Wolff and Resnick claim that what is distinct about Marxian class analysis is that class divisions result from capitalists extracting surplus labor time from workers, not from capitalists' power or their ownership of property. As Wolff writes, "Marx defined class not in terms of wealth, income, or power, but rather in terms of the surplus."

Marx divides a worker's time on a job into two parts. The first part of the average working day is "necessary" labor time, through which a worker produces his or her sustenance and that of his/her family. The remainder of the working day is "surplus" labor time. Marx said that this surplus labor time is the time during which the worker continues to produce, but the products generated during this time are claimed by the capitalist who has employed the worker. Marx uses the term exploitation to refer specifically to the ability of capitalists to extract surplus labor time from their workers.

My difference with Wolff over defining class in terms of the surplus, as opposed to property and power, is straightforward. In reality, no worker would allow a capitalist to extract surplus labor time from her or him if this worker had the power to prevent it. And why don't workers have such power? Because the workers do not own their own means of production, in other words, their own means of survival. They do not own property or hold enough wealth to keep themselves and their families alive. If they did hold significant amounts of wealth, they would then have more economic power, and they would not take a job with a capitalist that would allow the capitalist to extract surplus labor time from them. Thus the very notion of surplus extraction is inextricably intertwined with those of wealth, property ownership, and economic power.

This becomes obvious when we consider one of the overarching issues facing the global working class today: sweatshop labor conditions. There is no doubt that workers in sweatshops are being badly exploited by capitalists —i.e., that the workers are getting paid far less than the value of the goods they are producing. However, the single most important reason that sweatshops exist is that people accept these jobs, even given this reality of exploitation. True, once workers are hired into sweatshop firms, they are often forced to stay on the job though harsh forms of compulsion. Still, for the most part, workers could escape exploitation in sweatshops simply by refusing to show up at work.

The fact that they do show up means that sweatshop employment represents an option that is superior to their next best alternative. That is, if sweatshop workers had money saved up or productive assets to fall back on, they would not show up at the sweatshop, and they could still keep themselves and their families alive. Or, even without savings or productive assets, sweatshop workers could still lessen their exploitation if they had more organized political power. The fact that they don't have property or power is precisely the reason that they are exploited every day in sweatshops. In my view, Wolff's insistence on making a sharp analytical distinction between surplus labor extraction, on the one hand, and property ownership and power, on the other, as the bases for class exploitation leaves him with no coherent explanation for this most basic feature of social reality today, the sweatshop.

Moreover, the situation facing the sweatshop worker is actually part of a more general problem facing workers in capitalist societies—the issue of unemployment, underemployment, and what Marx famously termed "the Reserve Army of Labor." Marx devoted a 100-page chapter to this question in Volume 1 of Capital alone. The reason for Marx's attention to this issue is clear. The reserve army of unemployed and underemployed workers is what keeps workers' bargaining power weak, and it keeps workers divided among themselves, competing for scarce job opportunities. In an economy with something approximating true full employment, workers could bargain up their wages and improve working conditions. The workers would then also have more money with which they could, among other things, save, buy their own productive assets, or strengthen their unions. With the workers acquiring additional power and assets, the capitalists would then have to compete increasingly to attract workers onto their payrolls. The capitalists' ability to extract surplus labor time from workers would fall. Thus, bargaining power is at the very center of understanding surplus extraction; and unemployment—i.e. maintaining a sufficiently large reserve army of labor—is an indispensable tool that capitalists use to maintain their bargaining power advantage.

However, Wolff's article does not mention any of the issues surrounding unemployment, underemployment, and the reserve army of labor. This was not an oversight on his part: in Knowledge and Class: A Marxian Critique of Political Economy, Wolff and Resnick's most comprehensive work, there is not a single reference for either the terms "unemployment" or "reserve army of labor" in the book's index. (By contrast, the index cites 37 references to "overdetermination," a widely used concept in the postmodernist academic literature.)

By ignoring the dynamics of unemployment and underemployment, Wolff and Resnick, in my view, have foreclosed the possibility that their approach can provide a viable theoretical basis for understanding class exploitation in capitalism. Moreover, simply to understand day-to-day reality under capitalism, much less to propose viable strategies for constructing democratic socialist societies, is impossible without grappling with the facts of global unemployment and underemployment. Let me emphasize this further: in my view, understanding the dynamics of unemployment and underemployment is crucial both for developing a coherent analysis of class exploitation in capitalist economies and for advancing effective strategies toward building a more egalitarian society.

To make this point more concrete, consider the fact that roughly 35% to 50% of the working people in less-developed countries are working in what are termed "informal" jobs as agricultural day laborers, urban street vendors, or at-home producers of clothing, among others. Women are disproportionately employed in such informal jobs. A high proportion of these jobs pay poverty-level wages or worse. But many informal workers do not receive wages at all because they are self-employed. For these people, the rate of surplus extraction is zero, since they don't work for a capitalist.

These informal workers form the pool of people who line up to be hired in sweatshops—i.e., to be exploited in a sweatshop is a better option for them than being self-employed selling matchbooks on the street. These informal workers, along with the sweatshop workers in developing countries, together form a still larger pool of workers defining the reserve army of labor for capitalists even in developed countries like the United States. Even when U.S. businesses do not actually outsource jobs to developing countries or import products from these countries, they can still make credible threats to U.S. workers, claiming, for example, "either you take a pay cut or we move your job to El Salvador, where wages are a tenth of what we pay you." Such threats play a crucial role in maintaining low wages and exploitative working conditions in the United States.

This reality of the global labor market brings up a fundamental weakness in Wolff's and Resnick's use of the concept of surplus extraction itself. For example, how do we usefully compare the rate of surplus extraction between a Toyota autoworker in Tennessee and a garment worker in El Salvador? The autoworker in Tennessee earns wages perhaps 30 to 40 times more than the garment worker in El Salvador. But if we simply apply the formal definition of surplus extraction—that is, the percentage of workers' total labor time that goes to the capitalist rather than to their own wage—the Tennessee auto worker could be more exploited than the El Salvador garment worker.

In fact, this basic difference in living standards between these two workers matters a lot, regardless of how we measure their relative rate of surplus extraction. Such differences need to be recognized. At the most obvious level, it matters for one's life opportunities whether a worker and her family are living on $40,000 a year or $1,000 a year. Such differences in incomes also matter for understanding a range of political issues, including why millions of workers in developing countries try to enter the U.S. workforce, to be exploited by capitalists in the United States as opposed to in, say, El Salvador.

Marx speaks to these issues in his own discussion of surplus value. In writing on the definition of surplus value and the length of the working day, Marx writes as follows: "The extension of the working day encounters moral obstacles. The worker needs time in which to satisfy his intellectual and social requirements, and the extent and the number of these requirements is conditioned by the general level of civilization" (Capital, Volume I, p. 341 of Vintage edition). The implication of what Marx is saying here is clear: we cannot say hard and fast what the rate of surplus value is, because we cannot cleanly divide a workers' labor time over the course of a working day between what is necessary for the workers' sustenance and what goes to the capitalist as surplus. Before we can divide up the workers' time in this way, we first need to establish what is the "general level of civilization" in a given society And this "general level of civilization" is never something that is handed us on a silver platter. It rather depends first on the total amount of goods and services that the economy produces—i.e. the level of productivity, or what Marx termed the "forces of production." It also then depends on how evenly this total supply of goods and services is distributed. A society that operates with strong institutions of solidarity will distribute its total supply of goods and services more evenly, thereby expanding the time for a worker "to satisfy his intellectual and social requirements."

Overall, Rick Wolff and his collaborator Stephen Resnick deserve respect for their attempt to bring fresh thinking to Marxian economics. However, in my view, their theoretical approach is not viable, either as a foundation for understanding social and economic reality or as a tool for helping to build a more democratic, egalitarian future.

Robert Pollin is professor of economics and co-director of the Political Economy Research Institute at the University of Massachusetts, Amherst. He is author, among other works, of Contours of Descent: U.S. Economic Fractures and the Landscape of Global Austerity (2003).