How much money? – a question we hear on a daily basis – be it at the supermarket or the restaurant, when we ask ourselves how much the bill would cost; when applying for a Master’s programme and checking what its tuition fee is; after a job interview when wondering what our salary would be once offered the job… Money plays a central role in the economy. This might sound pretty straightforward and to an extent it is – money is used as a measurement of value. The value of a meal at a restaurant is therefore represented by the amount of money one pays for it. The value of the services (education and the likes) one receives while doing the Master’s programme is represented by the tuition fee they pay (and in cases of public universities, also in part funding from the state), and the value of one’s work is represented by the salary they get for it. This latter example, however, is where things get a bit complicated and not so straightforward. Labour (activities and efforts performed by one in order to produce goods/services, measured in terms of wages) is peculiar.
Despite the fact that we live in times of a constant change in all regards, labour remains a key aspect of the world economy, without which the economy would not be able to function. The human input of efforts in the production process, albeit expected to logically be less and less necessary nowadays, has proven to be a non-substitutive economic aspect. To put in simpler terms, one would expect that with the advent of new technologies, which would be able to replace human labour, human labour processes would become less and less necessary. Yet, historically speaking, with the advent of modern technologies, we have not really seen a drop in the need of human labour – just the opposite! With the advent of the conveyer line, for example, the amount of workers necessary to produce a product, or commodity (something that could be bought, sold, and used), might have decreased, but this did not mean that fewer labourers were needed on the job. The logic of constant expansion of the dominant world economic system would simply not be sustained would human labour be substituted by technology.
To clarify, once an easier and cheaper way is found to produce a commodity, it would be logical for it to be used in order to make more profit, more money. However, such a change in who does the production would not stop with a mere substitution of the producer. Since the economy needs to grow, it seeks new ways to multiply capital and create money. In recent historical times, especially after the Industrial Revolution, money has become a goal in it and of itself, therefore the sole aim of the economic system has been to create more money. Unlike in earlier times: for a long time money has been used just as a means to buy a commodity (say, grains). Here the following logic applies – an artisan (for example in the 18th century or earlier) makes a clay pot (a commodity) in order to sell it for money which he would use to buy something (another commodity, for example grains) to sustain his life. This could be simply visualised using the critical (Marxian) formula:
C – M – C’
where C stands for the produced commodity (clay pot), M stands for the money the artisan has earned by selling the initial commodity, and C’ stands for the second commodity (the grains the artisan has bought with the earned money). The earned money represent the value of the sold clay pot. The production process of this pot, however, necessitated input from the artisan – he needed to use his hands, materials, and time, to make it, to create it from scratch. Therefore, we could say that his labour is of value too. The artisan could not have sold the clay pot only calculating for the materials used, as he would not have been able to afford the grains he bought after selling the pot. Therefore, the money he earned from selling the pot (the profit he made) would be the price of the final product minus the price of the materials he has used:
Pfinal – Pmaterials = Pgained
where Pfinal is the price he sold the pot for, Pmaterials was the price he paid for the materials, and Pgained was the profit.
We could say that the profit was the amount of money he needed in order to buy the grains and that is why he added it to the calculated price of the clay pot materials. We could also say that this profit was the price of the efforts he put into making the clay pot – the monetary representation of the labour he put into making the clay pot. The price of his labour. This logic, however, would be valid in times when life sustainment would be more important than money-making, and before the rise of the nowadays dominant economic system.
The advent of modern capitalism, in turn, brought about the logic of constant expansion which altered the C – M – C’ formula by re-imagining the purpose of commodities and money. Instead of using money to buy new commodities which would be exploited for their use value (one of the two characteristics of a commodity, the other being exchange value), money would be used as capital, as an investment, to buy a commodity and then use this commodity’s exchange value (value for money) to make more money:
M – C – M’
where M is the initial money, the one used to produce or buy a commodity, C is the commodity in question, and M’ is the desired outcome – more money than the one initially invested.
Here, too, labour is of key importance. It is used in the process of commodity production, in which it is labour processes which indeed create a commodity (be it with the help of technology or not). This human input adds the value to the commodity in question, which could be sold for more money than the one invested. This is also how the money-making logic works. The whole process, however, requires another party – a party willing to invest, having money which it wants and needs to multiply. This party (say, a business owner, a confectioner, for instance) invests a certain amount of money in a twofold way – (1) to buy the products they need to produce a cake (and to cover for other costs) and (2) to pay to someone to make that cake, to pay for the labour one would input (unless the confectioner is the one making it). The products themselves cannot add value to the final commodity (cake) so that it be sold for more than the price of the products themselves. It is, then, the labour input what allowed the confectioner to sell the cake for more than the money they invested in making it.
In this example of money-making it seems that labour is not an apparent, evident aspect, which is easily recognised. Yet, it is easily monetised and its value is acknowledged by the amount of money which is paid for this labour. This financialisation of labour is a key characteristic of the modern economy, and it makes sense. Let us remember – if something makes money for the economy, it is important for it. Does labour make money? Of course – the value added by the labour process in the process of commodity production is key when it comes to money-making. Here comes the issue, though – it is not only wage labour that exists in the world. Or rather, not all labour performed is paid for.
Labour by definition is linked to efforts made (related to commodity production), which are paid for, therefore directly linked to money (both in terms of earning – wages, and in terms of making – profit). This is why labour is the economic term. At times, however, labour and work are interchangeably used – both meaning efforts made for a goal. While work is the more general term, referring to both paid and non-paid activities, it is also the term usually disregarded by economic debates. There are so many more human efforts exerted that contribute to the sustainment of the economy than wage labour. Yet, they remain unaccounted for. Social reproduction (all the efforts performed outside of wage labour in order for a person/people to sustain their families, doing groceries, cooking, cleaning, taking care of one and so on) is the generic term that is used by (critical) thinkers to bring together such efforts, such work, such unpaid labour if one wills. It brings so much more than just efforts which bring money directly. Yet, the economy has failed to consider it an important aspect of itself, as it does not evidently fall into the if it makes money, count it in logic. The same economy which tends to purposefully choose which parts of the natural environment to care for, and which not to, once again forgets about a hidden aspect of itself.
In this following part of ‘Hidden from the Economy’ I aim to uncover how the world economic system purposefully or accidentally ‘hides’ some labour and work from itself, despite these labour and work being critical for the economic system’s sustainment. Here, the no money – no importance logic is slightly different. In this case, the economy seems to be in a complex relationship with different types of labour and work it depends on. In the next couple of articles I shall discuss this relationship and focus on answering the question ‘how and why does the economy externalise some labour and work processes, and accounts for other?’. All of this because in order for us to understand labour- and work-related issues, we need to first get a grasp on how they came into being, and why they keep materialising.
