A Marxist analysis of the iPhone

"We are interested in looking at the production of the iPhone – a commodity – through the framework of a Marxist analysis. We are interested not in being angry at Apple and Foxconn alone, but in being able to measure how much workers are exploited to produce this commodity. In other words, we are interested in measuring the rate of exploitation.

The rate of exploitation is one of the most important concepts in Marx’s theory. This measurement allows us to show how much the worker contributes to the increase of value in the production process. It shows that even if the worker is paid more, by the special magic of mechanisation and of efficient management of the production process, the rate of exploitation increases. The rate expresses quantitatively the contradictory interests of the capitalists and of the workers. There is a radical politics implicit in the analysis of the rate of exploitation. It enables workers to see how much of the share of the value produced is appropriated from them by the capitalists, and to therefore make the case for a different way to organise production and to end exploitation.

To understand the rate of exploitation, we have to first grasp what Marx means by the commodity itself and what he means by value, a key term in the Marxist system of economic thought.

What is a commodity? Marx begins his epic work Capital (1867) with a discussion of the commodity. ‘A commodity’, he notes, ‘is an object outside us, a thing that by its properties satisfies human wants of some sort or another. The nature of such wants, whether, for instance, they spring from the stomach or from fancy, makes no difference. Neither are we concerned to know how the object satisfies these wants, whether directly as a means of subsistence, or indirectly as means of production’. The commodity is a useful object. But it is more than a useful thing that serves a purpose to a consumer. It is also something that can be sold – something that enables the person who has it made to realise a profit. Inside the commodity, then, is both use valueand value.

The use value of the commodity is merely its utility, something that is left to the consumer. An iPhone is a good example, because it can be used for many things: to make a phone call, to watch a video, to use as a compass, to hold onto when you are feeling awkward (or even to improve your image).

The expression of the value of the commodity (i.e. exchange value) is the price of the commodity. We are aware that there is a rich and long debate amongst Marxists over the relationship between prices and the value of a commodity. This debate is known as the transformation problem – namely the problem of the transformation of values to prices of production. Nevertheless, for our iPhone example, we believe that this level of concreteness need not detain us. We are still able to capture something significant. In the case of the iPhone X, the expression of its value is $999. The value is merely what the commodity is able to command in the market. But behind that price is a mass of crystallised values, which can be grouped into three parts of the total value: constant capital, variable capital, and surplus value. These are key concepts for Marxist analysis.

Constant capital

Various raw materials are brought on to the factory floor that are to be transformed by the actions of labour and machines into commodities. These raw materials – and other auxiliary materials, including the instruments of labour (machines, tools, etc.) – have already been fashioned from nature elsewhere. Inside these raw materials, which are not really ‘raw’ any longer, is embodied labour. The values of the various raw materials and instruments of labour are quantitatively fixed in terms of their labour content. This fixed amount of value is now transferred to the newly produced commodities in the process of production. Its value enters into the new commodities. Karl Marx calls the values of the raw materials and the instruments of labour constant capital.

The constant capital for the iPhone includes all of those minerals and metals that appear on the assembly line as well as the depreciated parts of machines that work those raw materials. These are then collectively transformed into the iPhone. In the process of transformation, the minerals, metals, and machines do not alter their value. Their value is preserved in the iPhone. The value remains constant.

At the end of the process of production, the total transferred value of those means of production – the raw materials, the machines, the buildings – cannot be more than what they originally contained in themselves. Their value, which remains constant, is preserved in the iPhone.

Variable capital.

The capitalist firm makes an initial investment in the production process:

• Wages and salaries for workers.
• Expenses on all non-human inputs, notably tools, machinery, buildings, energy, and so on.

The latter expense – the expense on all non-human inputs – is known as constant capital, as explained above.

The former expense – the expense on wages and salaries – is known as variable capital. To simplify our calculation, we assume that all workers are productive in the Marxist sense (namely, that they produce surplus value and do not merely distribute surplus value – as do ‘unproductive’ workers, such as those who are involved in trade).

In the capitalist system, people are ‘free’ in two ways. They are free from bondage and free to starve. The freedom from bondage and from the means to feed themselves forces people to sell their capacity to labour to those with capital (land or money). What the person sells is not themselves (since they are free from bondage), but they sell their labour power in exchange for wages. The wages correspond to a certain amount of money – representing a certain amount of value – that is necessary to satisfy the consumption needs of the workers. . .

http://www.socialisteconomist.com/2019/09/a-marxist-analysis-of-iphone.html?m=1