Introduction – Why this is important and what to look for

As with the previous selection (1c), this piece was written by Marx to workers themselves as an explanation of how wages were determined and valued. He would eventually have much more to say on the matter in his multi-volume masterpiece, Capital. When reading, think about your own experiences with work and wages. Does this explanation help you understand the social relationship between the worker and the employer?

Wage Labor and Capital

What are Wages? How are they Determined?

If several workmen were to be asked: “How much wages do you get?”, one would reply, “I get $9 an hour,” “$50 a day,” and so on. They would all agree upon one point: that wages are the amount of money which the capitalist pays for a certain period of work or for a certain amount of work.

Consequently, it appears that the capitalist buys their labor with money, and that for money they sell her their labor. But this is merely an illusion. What they actually sell to the capitalist for money is their labor-power. This labor-power the capitalist buys for a day, a week, a month, etc. And after she has bought it, she uses it up by letting the workers work during the stipulated time.

Wages are only a special name for the price of labor-power and are usually called the price of labor; it is the special name for the price of this peculiar commodity, which has no other repository than human flesh and blood.

Consequently, labor-power is a commodity which its possessor, the wage-worker, sells to the capitalist. Why does he sell it? It is in order to live.

But the putting of labor-power into action – i.e., the work – is the active expression of the laborer’s own life. And this life activity he sells to another person in order to secure the necessary means of life. His life-activity, therefore, is but a means of securing his own existence. He works that he may keep alive.

Labor-power was not always a commodity (merchandise). Labor was not always wage-labor, i.e., free labor. The slave did not sell her labor-power to the slave-owner, any more than the ox sells his labor to the farmer. The slave, together with her labor-power, was sold to her owner once for all. She is a commodity that can pass from the hand of one owner to that of another. She herself is a commodity, but her labor-power is not her commodity. The serf sells only a portion of his labor-power. It is not he who receives wages from the owner of the land; it is rather the owner of the land who receives a tribute from him. The serf belongs to the soil, and to the lord of the soil he brings its fruit. The free laborer, on the other hand, sells her very self, and that by fractions. She auctions off eight, 10, 12, 15 hours of her life, one day like the next, to the highest bidder, to the owner of raw materials, tools, and the means of life – i.e., to the capitalist. The laborer belongs neither to an owner nor to the soil, but eight, 10, 12, 15 hours of her daily life belong to whomsoever buys them. The worker leaves the capitalist, to whom she has sold herself, as often as she chooses, and the capitalist discharges her as often as he sees fit, as soon as he no longer gets any use, or not the required use, out of her. But the worker, whose only source of income is the sale of her labor-power, cannot leave the whole class of buyers, i.e., the capitalist class, unless she gives up her own existence. She does not belong to this or that capitalist, but to the capitalist class; and it is for her to find her own employer – i.e., to find a buyer in this capitalist class.

By what are wages determined?

Now, the same general laws which regulate the price of commodities in general, naturally regulate wages, or the price of labor-power. Wages will now rise, now fall, according to the relation of supply and demand, according as competition shapes itself between the buyers of labor-power, the capitalists, and the sellers of labor-power, the workers. The fluctuations of wages correspond to the fluctuation in the price of commodities in general. But within the limits of these fluctuations the price of labor-power will be determined by the cost of production, by the labor-time necessary for production of this commodity: labor-power.

What, then, is the cost of production of labor-power?

It is the cost required for the maintenance of the laborer as a laborer, and for his education and training as a laborer.

Therefore, the shorter the time required for training up to a particular sort of work, the smaller is the cost of production of the worker, the lower is the price of his labor-power, his wages. In those branches of industry in which hardly any period of apprenticeship is necessary, and the mere bodily existence of the worker is sufficient, the cost of his production is limited almost exclusively to the commodities necessary for keeping him in working condition. The price of his work will therefore be determined by the price of the necessary means of subsistence.

The Nature and Growth of Capital.

In the process of production, human beings work not only upon nature, but also upon one another. They produce only by working together in a specified manner and reciprocally exchanging their activities. In order to produce, they enter into definite connections and relations to one another, and only within these social connections and relations does their influence upon nature operate – i.e., does production take place.

These social relations between the producers, and the conditions under which they exchange their activities and share in the total act of production, will naturally vary according to the character of the means of production.

The relations of production in their totality constitute what is called the social relations, society, and, moreover, a society at a definite stage of historical development, a society with peculiar, distinctive characteristics. Ancient society, feudal society, bourgeois (or capitalist) society, are such totalities of relations of production, each of which denotes a particular stage of development in the history of mankind.

Capital also is a social relation of production. Capital is not only a sum of material products, it is a sum of commodities, of exchange values, of social magnitudes. Capital remains the same whether we put cotton in the place of wool, rice in the place of wheat, steamships in the place of railroads, provided only that the cotton, the rice, the steamships – the body of capital – have the same exchange value, the same price, as the wool, the wheat, the railroads, in which it was previously embodied. The bodily form of capital may transform itself continually, while capital does not suffer the least alteration.

The existence of a class which possesses nothing but the ability to work is a necessary presupposition of capital. It is only the dominion of past, accumulated, materialized labor over immediate living labor that stamps the accumulated labor with the character of capital. Capital does not consist in the fact that accumulated labor serves living labor as a means for new production. It consists in the fact that living labor serves accumulated labor as the means of preserving and multiplying its exchange value.

Relation of Wage-Labor to Capital.

What is it that takes place in the exchange between the capitalist and the wage-laborer? The laborer receives means of subsistence in exchange for his labor-power; the capitalist receives, in exchange for his means of subsistence, labor, the productive activity of the laborer, the creative force by which the worker not only replaces what he consumes, but also gives to the accumulated labor a greater value than it previously possessed. The laborer gets from the capitalist a portion of the existing means of subsistence.

Does a worker in a cotton factory produce only cotton? No. She produces capital. She produces values which serve anew to command her work and to create by means of its new values. Capital can multiply itself only by exchanging itself for labor-power, by calling wage-labor into life. The labor-power of the wage-laborer can exchange itself for capital only by increasing capital, by strengthening that very power whose slave it is. Increase of capital, therefore, is increase of the proletariat, i.e., of the working class.

And so, the bourgeoisie and its economists maintain that the interest of the capitalist and of the laborer is the same. And in fact, so they are! The worker perishes if capital does not keep him busy. Capital perishes if it does not exploit labor-power, which, in order to exploit, it must buy.

But what is growth of productive capital? Growth of the power of accumulated labor over living labor; growth of the rule of the bourgeoisie over the working class. When wage-labor produces the alien wealth dominating it, the power hostile to it, capital, there flow back to it its means of employment – i.e., its means of subsistence, under the condition that it again become a part of capital, that is become again the lever whereby capital is to be forced into an accelerated expansive movement.

To say that the interests of capital and the interests of the workers are identical, signifies only this: that capital and wage-labor are two sides of one and the same relation. The one conditions the other in the same way that the usurer and the borrower condition each other.

As long as the wage-laborer remains a wage-laborer, his lot is dependent upon capital.

Wages are determined above all by their relations to the gain, the profit, of the capitalist. In other words, wages are a proportionate, relative quantity.

If capital grows, the mass of wage-labor grows, the number of wage-workers increases; in a word, the sway of capital extends over a greater mass of individuals.

What, then, is the general law that determines the rise and fall of wages and profit in their reciprocal relation? They stand in inverse proportion to each other. The share of (profit) increases in the same proportion in which the share of labor (wages) falls, and vice versa. Profit rises in the same degree in which wages fall; it falls in the same degree in which wages rise.

We thus see that the interests of capitals and the interests of wage-labor are diametrically opposed to each other.

If the income of the worker increased with the rapid growth of capital, there is at the same time a widening of the social chasm that divides the worker from the capitalist, and increase in the power of capital over labor, a greater dependence of labor upon capital. To say that “the worker has an interest in the rapid growth of capital”, means only this: that the more speedily the worker augments the wealth of the capitalist, the larger will be the crumbs which fall to him, the greater will be the number of workers than can be called into existence, the more can the mass of slaves dependent upon capital be increased.

The more productive capital grows, the more it extends the division of labor and the application of machinery; the more the division of labor and the application of machinery extend, the more does competition extend among the workers, the more do their wages shrink together. Capitalists are forced to compete with each other in order to stay in business. They replace workers with machinery wherever possible. They replace skilled workers with unskilled workers, which are less costly. Capitalists who cannot compete (especially small business owners) become proletarians themselves.

Machinery supplants skilled laborers by unskilled, men by women, adults by children; where newly introduced, it throws workers upon the streets in great masses; and as it becomes more highly developed and more productive it discards them in additional though smaller numbers. The laborer seeks to maintain the total of his wages for a given time by performing more labor, either by working a great number of hours, or by accomplishing more in the same number of hours. Thus, urged on by want, he himself multiplies the disastrous effects of division of labor. The result is: the more he works, the less wages he receives. And for this simple reason: the more he works, the more he competes against his fellow workmen, the more he compels them to compete against him, and to offer themselves on the same wretched conditions as he does; so that, in the last analysis, he competes against himself as a member of the working class.

Capital not only lives upon labor. Like a master, at once distinguished and barbarous, it drags with it into its grave the corpses of its slaves, whole hecatombs of workers, who perish in the crises.

We thus see that if capital grows rapidly, competition among the workers grows with even greater rapidity – i.e., the means of employment and subsistence for the working class decrease in proportion even more rapidly; but, this notwithstanding, the rapid growth of capital is the most favorable condition for wage-labor.

 

Concepts

Polarization

Concentration of Capital

Surplus Value

Mode of Production

Means of Production

Free Wage Labor

Labor Power

Commodity