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What does this difference mean? Under what was called the putting-out system, merchant capitalists would take materials to laborers in their cottages and return to collect the worked-up product at a later date. The laborers would not be supervised, and the labor process would be left up to the cottagers (it often entailed family labor and was dovetailed with subsistence agricultural practices). But the cottagers depended on the merchant capitalists for their monetary incomes and did not own the product they worked up. This is what Marx means by formal subsumption. When laborers are brought into the factory for a wage, then both they and the labor process are under the direct supervision of the capitalist. This is real subsumption. So the formal is out there, dependent, while the real is inside the factory under the supervision of the capitalist. The latter entails more start-up costs, more initial capital; in the early stages of capitalism, when capital was scarce, the formal system of exploitation could well be more advantageous. Marx believed that over time, the formal would give way to the real. But he was not necessarily correct in this. The revival of contract work, home working and the like in our times indicates that some reversion to formal kinds of subjection and subsumption is entirely possible.
When laborers are brought into a collective structure of cooperation in a factory, they come under the directing authority of the capitalist. Any cooperative endeavor requires some directing authority, much as a conductor directs an orchestra. The problem is that “the work of directing, superintending and adjusting becomes one of the functions of capital, from the moment that the labour under capital’s control becomes co-operative.” Furthermore, “as a specific function of capital, the directing function acquires its own special characteristics.” This function is to recognize that moments are the elements of profit and to squeeze as much labor-time out of the laborer as possible. On the other hand, “as the number of co-operating workers increases, so too does their resistance to the domination of capital, and, necessarily, the pressure put on by capital to overcome this resistance” (449).
The struggle between capital and labor, which we earlier encountered in the labor market, gets internalized on the shop floor. This happens because cooperation is organized through the power of capital. What was once a power of labor now appears as a power of capital.
The interconnection between their various labours confronts [the laborers], in the realm of ideas, as a plan drawn up by the capitalist, and, in practice, as his authority, as the powerful will of a being outside them, who subjects their activity to his purpose. (450)
The capitalist’s purpose is to secure “on the one hand a social labour process for the creation of a product, and on the other hand capital’s process of valorization,” i.e., the production of surplus-value. This entails the development of a specific kind of labor process in which the “work of direct and constant supervision of the individual workers and groups of workers” results in “a special kind of wage-labourer. An industrial army of workers under the command of a capitalist requires, like a real army, officers (managers) and N.C.O.s (foremen, overseers).” A certain structure of supervision of the workers emerges which is both authoritarian and “purely despotic.” In this, the capitalist acquires a distinctive role as orchestrator of the labor process in all its aspects. “It is not because he is a leader of industry that a man is a capitalist; on the contrary, he is a leader of industry because he is a capitalist. The leadership of industry is an attribute of capital” (450–1). Only by way of command over the labor process can capital be both produced and reproduced. Laborers, on the other hand,
enter into relations with the capitalist, but not with each other. Their cooperation only begins with the labour process, but by then they have ceased to belong to themselves. On entering the labour process they are incorporated into capital. As co-operators, as members of a working organism, they merely form a particular mode of existence of capital.
Workers lose their personhood and become mere variable capital. This is what Marx means by the real subsumption of the laborer under capital.
The socially productive power of labour develops as a free gift to capital whenever the workers are placed under certain conditions, and it is capital which places them under these conditions. Because this power costs capital nothing, while on the other hand it is not developed by the worker until his labour itself belongs to capital, it appears as a power which capital possesses by its nature—a productive power inherent in capital. (451)
An inherent power of labor, the social power of cooperation, is appropriated by capital and made to appear as a power of capital over the workers. Historical examples of enforced cooperation abound—the Middle Ages, slavery, colonies, slave labor—but under capitalism the connection of organized cooperation to wage labor is manifest in special ways. This had a key role in the rise of capitalism.
The simultaneous employment of a large number of wage-labourers in the same labour process … forms the starting-point of capitalist production. This starting-point coincides with the birth of capital itself. If then, on the one hand, the capitalist mode of production is a historically necessary condition for the transformation of the labour process into a social process, so, on the other hand, this social form of the labour process is a method employed by capital for the more profitable exploitation of labour, by increasing its productive power. (453)
This originary status of a certain form of cooperation is perpetuated throughout the whole history of capitalism.
Simple co-operation has always been, and continues to be, the predominant form in those branches of production in which capital operates on a large scale, but the division of labour and machinery play only an insignificant part … Co-operation remains the fundamental form of the capitalist mode of production, although in its simple shape it continues to appear as one particular form alongside the more developed ones. (454)
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