Karl Marx

Wage Labour and Capital

## Introduction to Karl Marx’s Wage Labour and Capital by Frederick Engels

This pamphlet first appeared in the form of a series of leading articles in
the Neue
Rheinische Zeitung, beginning on April 4th, 1849. The text is made up of
from lectures delivered by Marx before the German Workingmen’s Club of
Brussels in 1847. The series was never completed. The promise “to be
continued,” at the end of the editorial in Number 269 of the newspaper,
remained unfulfilled in consequence of the precipitous events of that time: the
invasion of Hungary by the Russians [Tsarist troops
invaded Hungary in 1849 to keep the Austrian Hapsburg dynasty in power],
and the uprisings in Dresden, Iserlohn, Elberfeld, the Palatinate, and in Baden
[Spontaneous uprisings in Germany in May-July 1849,
supporting the Imperial Constitution which were crushed in mid-July],
which led to the suppression of the paper on May 19th, 1849. And among the
papers left by Marx no manuscript of any continuation of these articles has
been found.

“Wage-labour and Capital” has appeared as an independent
publication in several editions, the last of which was issued by the Swiss
Co-operative Printing Association, in Hottingen-Zurich, in 1884. Hitherto, the
several editions have contained the exact wording of the original articles. But
since at least 10,000 copies of the present edition are to be circulated as a
propaganda tract, the question necessarily forced itself upon me, would Marx
himself, under these circumstance, have approved of an unaltered literal
reproduction of the original?

Marx, in the ’40s, had not yet completed his criticism of political
economy. This was not done until toward the end of the fifties. Consequently,
such of his writings as were published before the first installment of his Critique of Political
Economy was finished, deviate in some points from those written after 1859,
and contain expressions and whole sentences which, viewed from the standpoint
of his later writings, appear inexact, and even incorrect. Now, it goes without
saying that in ordinary editions, intended for the public in general, this
earlier standpoint, as a part of the intellectual development of the author,
has its place; that the author as well as the public, has an indisputable right
to an unaltered reprint of these older writings. In such a case, I would not
have dreamed of changing a single word in it. But it is otherwise when the
edition is destined almost exclusively for the purpose of propaganda. In such a
case, Marx himself would unquestionably have brought the old work, dating from
1849, into harmony with his new point of view, and I feel sure that I am acting
in his spirit when I insert in this edition the few changes and additions which
are necessary in order to attain this object in all essential point.

Therefore, I say to the reader at once: this pamphlet is not as Marx wrote
it in 1849, but approximately as Marx would have written it in 1891. Moreover,
so many copies of the original text are in circulation, that these will suffice
until I can publish it again unaltered in a complete edition of Marx’s
works, to appear at some future time.

My alterations centre about one point. According to the original reading,
the worker sells his labour for wages, which he receives from the
capitalist; according to the present text, he sells his labour-power.
And for this change, I must render an explanation: to the workers, in order
that they may understand that we are not quibbling or word-juggling, but are
dealing here with one of the most important points in the whole range of
political economy; to the bourgeois, in order that they may convince themselves
how greatly the uneducated workers, who can be easily made to grasp the most
difficult economic analyses, excel our supercilious “cultured" folk, for
whom such ticklish problems remain insoluble their whole life long.

Classical political economy[1]
borrowed from the industrial practice the current notion of the manufacturer,
that he buys and pays for the labour of his employees. This conception had been
quite serviceable for the business purposes of the manufacturer, his
bookkeeping and price calculation. But naively carried over into political
economy, it there produced truly wonderful errors and confusions.

Political economy finds it an established fact that the prices of all
commodities, among them the price of the commodity which it calls
“labour,” continually change; that they rise and fall in
consequence of the most diverse circumstances, which often have no connection
whatsoever with the production of the commodities themselves, so that prices
appear to be determined, as a rule, by pure chance. As soon, therefore, as
political economy stepped forth as a science, it was one of its first tasks to
search for the law that hid itself behind this chance, which apparently
determined the prices of commodities, and which in reality controlled this very
chance. Among the prices of commodities, fluctuating and oscillating, now
upward, now downward, the fixed central point was searched for around which
these fluctuations and oscillations were taking place. In short, starting from
the price of commodities, political economy sought for the value of commodities
as the regulating law, by means of which all price fluctuations could be
explained, and to which they could all be reduced in the last resort.

And so, classical political economy found that the value of a commodity was
determined by the labour incorporated in it and requisite to its production.
With this explanation, it was satisfied. And we, too, may, for the present,
stop at this point. But, to avoid misconceptions, I will remind the reader that
today this explanation has become wholly inadequate. Marx was the first to
investigate thoroughly into the value-forming quality of labour and to discover
that not all labour which is apparently, or even really, necessary to the
production of a commodity, imparts under all circumstances to this commodity a
magnitude of value corresponding to the quantity of labour used up. If,
therefore, we say today in short, with economists like Ricardo, that the value
of a commodity is determined by the labour necessary to its production, we
always imply the reservations and restrictions made by Marx. Thus much for our
present purpose; further information can be found in Marx’s Critique
of Political Economy, which appeared in 1859, and in the first volume of
Capital.

But, as soon as the economists applied this determination of value by labour
to the commodity “labour", they fell from one contradiction into another.
How is the value of “labour” determined? By the necessary labour
embodied in it. But how much labour is embodied in the labour of a labourer of
a day a week, a month, a year. If labour is the measure of all values, we can
express the “value of labour” only in labour. But we know
absolutely nothing about the value of an hour’s labour, if all that we
know about it is that it is equal to one hour’s labour. So, thereby, we
have not advanced one hair’s breadth nearer our goal; we are constantly
turning about in a circle.

Classical economics, therefore, essayed another turn. It said: the value of
a commodity is equal to its cost of production. But, what is the cost of
production of “labour"? In order to answer this question, the economists
are forced to strain logic just a little. Instead of investigating the cost of
production of labour itself, which, unfortunately, cannot be ascertained, they
now investigate the cost of production of the labourer. And this
latter can be ascertained. It changes according to time and circumstances, but
for a given condition of society, in a given locality, and in a given branch of
production, it, too, is given, at least within quite narrow limits. We live
today under the regime of capitalist production, under which a large and
steadily growing class of the population can live only on the condition that it
works for the owners of the means of production – tools, machines, raw
materials, and means of subsistence – in return for wages. On the basis
of this mode of production, the labourer’s cost of production consists of
the sum of the means of subsistence (or their price in money) which on the
average are requisite to enable him to work, to maintain in him this capacity
for work, and to replace him at his departure, by reason of age, sickness, or
death, with another labourer – that is to say, to propagate the working
class in required numbers.

Let us assume that the money price of these means of subsistence averages 3
shillings a day. Our labourer gets, therefore, a daily wage of 3 shillings from
his employer. For this, the capitalist lets him work, say, 12 hours a day. Our
capitalist, moreover, calculates somewhat in the following fashion: Let us
assume that our labourer (a machinist) has to make a part of a machine which he
finishes in one day. The raw material (iron and brass in the necessary prepared
form) costs 20 shillings. The consumption of coal by the steam-engine, the
wear-and-tear of this engine itself, of the turning-lathe, and of the other
tools with which our labourer works, represent, for one day and one labourer, a
value of 1 shilling. The wages for one day are, according to our assumption, 3
shillings. This makes a total of 24 shillings for our piece of a machine.

But, the capitalist calculates that, on an average, he will receive for it a
price of 27 shillings from his customers, or 3 shillings over and above his
outlay.

Whence do they 3 shillings pocketed by the capitalist come? According to the
assertion of classical political economy, commodities are in the long run sold
at their values, that is, they are sold at prices which correspond to the
necessary quantities of labour contained in them. The average price of our part
of a machine – 27 shillings – would therefore equal its value,
i.e., equal the amount of labour embodied in it. But, of these 27 shillings, 21
shillings were values already existing before the machinist began
to work; 20 shillings were contained in the raw material, 1 shilling in the
fuel consumed during the work and in the machines and tools used in the process
and reduced in their efficiency to the value of this amount. There remains 6
shillings, which have been added to the value of the raw material. But,
according to the supposition of our economists, themselves, these 6 shillings
can arise only from the labour added to the raw material by the labourer. His
12 hours’ labour has created, according to this, a new value of 6
shillings. Therefore, the value of his 12 hours’ labour would be
equivalent to 6 shillings. So we have at last discovered what the “value
of labour” is.

“Hold on there!” cries our machinist. “Six shillings? But
I have received only 3 shillings! My capitalist swears high and day that the
value of my 12 hours’ labour is no more than 3 shillings, and if I were
to demand 6, he’d laugh at me. What kind of a story is that?"

If before this we got with our value of labour into a vicious circle, we now
surely have driven straight into an insoluble contradiction. We searched for
the value of labour, and we found more than we can use. For the labourer, the
value of the 12 hours’ labour is 3 shillings; for the capitalist, it is 6
shillings, of which he pays the workingman 3 shillings as wages, and pockets
the remaining 3 shilling himself. According to this, labour has not one but two
values, and, moreover, two very different values!

As soon as we reduce the values, now expressed in money, to labour-time, the
contradiction becomes even more absurd. By the 12 hours’ labour, a new
value of 6 shillings is created. Therefore, in 6 hours, the new value created
equals 3 shillings – the amount which the labourer receives for 12
hours’ labour. For 12 hours’ labour, the workingman receives, as an
equivalent, the product of 6 hours’ labour. We are, thus, forced to one
of two conclusions: either labour has two values, one of which is twice as
large as the other, or 12 equals 6! In both cases, we get pure absurdities.
Turn and twist as we may, we will not get out of this contradiction as long as
we speak of the buying and selling of “labour” and of the
“value of labour.” And just so it happened to the political
economists. The last offshoot of classical political economy – the
Ricardian school – was largely wrecked on the insolubility of this
contradiction. Classical political economy had run itself into a blind alley.
The man who discovered the way out of this blind alley was Karl Marx.

What the economists had considered as the cost of production of
“labour” was really the cost of production, not of
“labour,” but of the living labourer himself. And what this
labourer sold to the capitalist was not his labour.

“So soon as his labour really begins,” says
Marx, “it ceases to belong to him, and therefore can no longer be sold by
him.”

At the most, he could sell his future labour – i.e., assume
the obligation of executing a certain piece of work in a certain time. But, in
this way, he does not sell labour (which would first have to be performed), but
not for a stipulated payment he places his labour-power at the disposal of the
capitalist for a certain time (in case of time-wages), or for the performance
of a certain task (in case of piece-wages). He hires out or sells his
labour-power. But this labour-power has grown up with his person and
is inseparable from it. Its cost of production, therefore, coincides with his
own cost of production; what the economist called the cost of production of
labour is really the cost of production of the labourer, and therewith of his
labour-power. And, thus, we can also go back from the cost of production of
labour-power to the value of labour-power, and determine the quantity of social
labour that is required for the production of a labour-power of a given
quantity, as Marx has done in the chapter on “The Buying and Selling of
labour Power.” [Capital, Vol.I]

Now what takes place after the worker has sold his labour-power, i.e., after
he has placed his labour-power at the disposal of the capitalist for
stipulated-wages – whether time-wages or piece-wages? The capitalist
takes the labourer into his workshop or factory, where all the articles
required for the work can be found – raw materials, auxiliary materials
(coal, dyestuffs, etc.), tools, and machines. Here, the worker begins to work.
His daily wages are, as above, 3 shillings, and it makes no difference whether
he earns them as day-wages or piece-wages. We again assume that in 12 hours the
worker adds by his labour a new value of 6 shillings to the value of the raw
materials consumed, which new value the capitalist realizes by the sale of the
finished piece of work. Out of this new value, he pays the worker his 3
shillings, and the remaining 3 shillings he keeps for himself. If, now, the
labourer creates in 12 hours a value of 6 shillings, in 6 hours he creates a
value of 3 shillings. Consequently, after working 6 hours for the capitalist,
the labourer has returned to him the equivalent of the 3 shillings received as
wages. After 6 hours’ work, both are quits, neither one owing a penny to
the other.

“Hold on there!” now cries out the capitalist. “I have
hired the labourer for a whole day, for 12 hours. But 6 hours are only
half-a-day. So work along lively there until the other 6 hours are at an end
– only then will we be even.” And, in fact, the labourer has to
submit to the conditions of the contract upon which he entered of “his
own free will", and according to which he bound himself to work 12 whole hours
for a product of labour which cost only 6 hours’ labour.

Similarly with piece-wages. Let us suppose that in 12 hours our worker makes
12 commodities. Each of these costs a shilling in raw materials and
wear-and-tear, and is sold for 2.5 shillings. On our former assumption, the
capitalist gives the labourer .25 of a shilling for each piece, which makes a
total of 3 shillings for 12 pieces. To earn this, the worker requires 12 hours.
The capitalist receives 30 shillings for the 12 pieces; deducting 24 shillings
for raw materials and wear-and-tear, there remains 6 shillings, of which he
pays 3 shillings in wages and pockets the remaining 3. Just as before! Here,
also, the worker labours 6 hours for himself – i.e., to replace his wages
(half-an-hour in each of the 12 hours), and 6 hours for the capitalist.

The rock upon which the best economists were stranded, as long as they
started out from the value of labour, vanishes as soon as we make our
starting-point the value of labour-power. Labour-power is, in our
present-day capitalist society, a commodity like every other commodity, but yet
a very peculiar commodity. It has, namely, the peculiarity of being a
value-creating force, the source of value, and, moreover, when properly
treated, the source of more value than it possesses itself. In the present
state of production, human labour-power not only produces in a day a greater
value than it itself possesses and costs; but with each new scientific
discovery, with each new technical invention, there also rises the surplus of
its daily production over its daily cost, while as a consequence there
diminishes that part of the working-day in which the labourer produces the
equivalent of his day’s wages, and, on the other hand, lengthens that
part of the working-day in which he must present labour gratis to the
capitalist.

And this is the economic constitution of our entire modern society: the
working class alone produces all values. For value is only another expression
for labour, that expression, namely, by which is designated, in our capitalist
society of today, the amount of socially necessary labour embodied in a
particular commodity. But, these values produced by the workers do not belong
to the workers. They belong to the owners of the raw materials, machines,
tools, and money, which enable them to buy the labour-power of the working
class. Hence, the working class gets back only a part of the entire mass of
products produced by it. And, as we have just seen, the other portion, which
the capitalist class retains, and which it has to share, at most, only with the
landlord class, is increasing with every new discovery and invention, while the
share which falls to the working class (per capita) rises but little and very
slowly, or not at all, and under certain conditions it may even fall.

But, these discoveries and inventions which supplant one another with
ever-increasing speed, this productiveness of human labour which increases from
day to day to unheard-of proportions, at last gives rise to a conflict, in
which present capitalistic economy must go to ruin. On the one hand,
immeasurable wealth and a superfluidity of products with which the buyers
cannot cope. On the other hand, the great mass of society proletarianized,
transformed into wage-labourers, and thereby disabled from appropriating to
themselves that superfluidity of products. The splitting up of society into a
small class, immoderately rich, and a large class of wage-labourers devoid of
all property, brings it about that this society smothers in its own
superfluidity, while the great majority of its members are scarcely, or not at
all, protected from extreme want.

This condition becomes every day more absurd and more unnecessary. It
must be gotten rid of; it can be gotten rid of. A new social order is
possible, in which the class differences of today will have disappeared, and in
which – perhaps after a short transition period, which, though somewhat
deficient in other respects, will in any case be very useful morally –
there will be the means of life, of the enjoyment of life, and of the
development and activity of all bodily and mental faculties, through the
systematic use and further development of the enormous productive powers of
society, which exists with us even now, with equal obligation upon all to work.
And that the workers are growing ever more determined to achieve this new
social order will be proven on both sides of the ocean on this dawning May Day,
and on Sunday, May 3rd. [Engels is referring to the May
Day celebrations of 1891]

FREDERICK ENGELS

London, April 30, 1891.

Footnotes

1. “By classical
political economy, I understand that economy which, since the time of W. Petty,
has investigated the real relations of production in bourgeois society, in
contradistinction to vulgar economy, which deals with appearances only,
ruminates without ceasing on the materials long since provided by scientific
economy, and there seeks plausible explanations of the most obtrusive phenomena
for bourgeois daily use, but for the rest confines itself to systematizing in a
pedantic way, and proclaiming for everlasting truths, trite ideas held by the
self-complacent bourgeoisie with regard to their own world, to them the best of
all possible worlds.”

(Karl Marx, Capital,
Vol.I, p.93f.)

Preliminary

Wage Labour and Capital Index

Karl Marx

Wage Labour and Capital

## Preliminary

From various quarters we have been reproached for neglecting to portray the
economic conditions which form the material basis of the present struggles
between classes and nations. With set purpose we have hitherto touched upon
these conditions only when they forced themselves upon the surface of the
political conflicts.

It was necessary, beyond everything else, to follow the development of the
class struggle in the history of our own day, and to prove empirically, by the
actual and daily newly created historical material, that with the subjugation
of the working class, accomplished in the days of February and March, 1848, the
opponents of that class – the bourgeois republicans in France, and the
bourgeois and peasant classes who were fighting feudal absolutism throughout
the whole continent of Europe – were simultaneously conquered; that the
victory of the "moderate republic" in France sounded at the same time the fall
of the nations which had responded to the February revolution with heroic wars
of independence; and finally that, by the victory over the revolutionary
workingmen, Europe fell back into its old double slavery, into the
English-Russian slavery. The June conflict in Paris, the fall of Vienna, the
tragi-comedy in Berlin in November 1848, the desperate efforts of Poland,
Italy, and Hungary, the starvation of Ireland into submission – these
were the chief events in which the European class struggle between the
bourgeoisie and the working class was summed up, and from which we proved that
every revolutionary uprising, however remote from the class struggle its object
might appear, must of necessity fail until the revolutionary working class
shall have conquered; – that every social reform must remain a Utopia
until the proletarian revolution and the feudalistic counter-revolution have
been pitted against each other in a world-wide war. In our presentation, as in
reality, Belgium and Switzerland were tragicomic caricaturish genre pictures in
the great historic tableau; the one the model State of the bourgeois monarchy,
the other the model State of the bourgeois republic; both of them, States that
flatter themselves to be just as free from the class struggle as from the
European revolution.

But now, after our readers have seen the class struggle of the year 1848
develop into colossal political proportions, it is time to examine more closely
the economic conditions themselves upon which is founded the existence of the
capitalist class and its class rule, as well as the slavery of the workers.

We shall present the subject in three great divisions:

The Relation of Wage-labour to Capital, the Slavery of the
Worker, the Rule of the Capitalist.

The Inevitable Ruin of the Middle Classes [petty-bourgeois]
and the so-called Commons [peasants] under the present system.

The Commercial Subjugation and Exploitation of the Bourgeois
classes of the various European nations by the Despot of the World Market
– England.

We shall seek to portray this as simply and popularly as possible, and shall
not presuppose a knowledge of even the most elementary notions of political
economy. We wish to be understood by the workers. And, moreover, there prevails
in Germany the most remarkable ignorance and confusion of ideas in regard to
the simplest economic relations, from the patented defenders of existing
conditions, down to the socialist wonder-workers and the unrecognized political
geniuses, in which divided Germany is even richer than in duodecimo
princelings. We therefore proceed to the consideration of the first problem.

What are Wages?

Wage Labour and Capital Index

Karl Marx

Wage Labour 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 two shillings a day", and so on.
According to the different branches of industry in which they are employed,
they would mention different sums of money that they receive from their
respective employers for the completion of a certain task; for example,
for weaving a yard of linen, or for setting a page of type. Despite the
variety of their statements, 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 labour
with money, and that for money they sell him their labour. But this is merely
an illusion. What they actually sell to the capitalist for money is their
labour-power. This labour-power the capitalist buys for a day, a week, a
month, etc. And after he has bought it, he uses it up by letting the worker
labour during the stipulated time. With the same amount of money with which
the capitalist has bought their labour-power (for example, with two shillings)
he could have bought a certain amount of sugar or of any other commodity.
The two shillings with which he bought 20 pounds of sugar is the price
of the 20 pounds of sugar. The two shillings with which he bought 12 hours'
use of labour-power, is the price of 12 hours' labour. Labour-power, then,
is a commodity, no more, no less so than is the sugar. The first is measured
by the clock, the other by the scales.

Their commodity, labour-power, the workers exchange for the commodity
of the capitalist, for money, and, moreover, this exchange takes place
at a certain ratio. So much money for so long a use of labour-power. For
12 hours' weaving, two shillings. And these two shillings, do they not
represent all the other commodities which I can buy for two shillings?
Therefore, actually, the worker has exchanged his commodity, labour-power,
for commodities of all kinds, and, moreover, at a certain ratio. By giving
him two shillings, the capitalist has given him so much meat, so much clothing,
so much wood, light, etc., in exchange for his day's work. The two shillings
therefore express the relation in which labour-power is exchanged for other
commodities, the exchange-value of labour-power.

The exchange value of a commodity estimated in money is called
its price. Wages therefore are only a special name for the price of labour-power,
and are usually called the price of labour; it is the special name for the
price of this peculiar commodity, which has no other repository than human
flesh and blood.

Let us take any worker; for example, a weaver. The capitalist
supplies him with the loom and yarn. The weaver applies himself to work,
and the yarn is turned into cloth. The capitalist takes possession of the
cloth and sells it for 20 shillings, for example. Now are the wages of
the weaver a share of the cloth, of the 20 shillings, of the product of
the work? By no means. Long before the cloth is sold, perhaps long before
it is fully woven, the weaver has received his wages. The capitalist, then,
does not pay his wages out of the money which he will obtain from the cloth,
but out of money already on hand. Just as little as loom and yarn are the
product of the weaver to whom they are supplied by the employer, just so
little are the commodities which he receives in exchange for his commodity
– labour-power – his product. It is possible that the employer found no
purchasers at all for the cloth. It is possible that he did not get even
the amount of the wages by its sale. It is possible that he sells it very
profitably in proportion to the weaver's wages. But all that does not concern
the weaver. With a part of his existing wealth, of his capital, the capitalist
buys the labour-power of the weaver in exactly the same manner as, with
another part of his wealth, he has bought the raw material – the yarn
– and the instrument of labour – the loom. After he has made these purchases,
and among them belongs the labour-power necessary to the production of the
cloth he produces only with raw materials and instruments of labour belonging
to him. For our good weaver, too, is one of the instruments of labour, and
being in this respect on a par with the loom, he has no more share in the
product (the cloth), or in the price of the product, than the loom itself
has.

Wages, therefore, are not a share of the worker in the commodities
produced by himself. Wages are that part of already existing commodities
with which the capitalist buys a certain amount of productive labour-power.

Consequently, labour-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 labour-power into action – i.e., the work –
is the active expression of the labourer'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. He does not count the labour itself as
a part of his life; it is rather a sacrifice of his life. It is a commodity
that he has auctioned off to another. The product of his activity, therefore,
is not the aim of his activity. What he produces for himself is not the
silk that he weaves, not the gold that he draws up the mining shaft, not
the palace that he builds. What he produces for himself is wages; and
the silk, the gold, and the palace are resolved for him into a certain
quantity of necessaries of life, perhaps into a cotton jacket, into copper
coins, and into a basement dwelling. And the labourer who for 12 hours long,
weaves, spins, bores, turns, builds, shovels, breaks stone, carries hods,
and so on – is this 12 hours' weaving, spinning, boring, turning, building,
shovelling, stone-breaking, regarded by him as a manifestation of life,
as life? Quite the contrary. Life for him begins where this activity ceases,
at the table, at the tavern, in bed. The 12 hours' work, on the other hand,
has no meaning for him as weaving, spinning, boring, and so on, but only
as earnings, which enable him to sit down at a table, to take his seat
in the tavern, and to lie down in a bed. If the silk-worm's object in spinning
were to prolong its existence as caterpillar, it would be a perfect example
of a wage-worker.

Labour-power was not always a commodity (merchandise). Labour was
not always wage-labour, i.e., free labour. The slave did not sell his labour-power
to the slave-owner, any more than the ox sells his labour to the farmer.
The slave, together with his labour-power, was sold to his owner once for
all. He is a commodity that can pass from the hand of one owner to that
of another. He himself is a commodity, but his labour-power is not his commodity.
The serf sells only a portion of his labour-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
labourer, on the other hand, sells his very self, and that by fractions.
He auctions off eight, 10, 12, 15 hours of his 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 labourer belongs neither to an owner
nor to the soil, but eight, 10, 12, 15 hours of his daily life belong to
whomsoever buys them. The worker leaves the capitalist, to whom he has
sold himself, as often as he chooses, and the capitalist discharges him
as often as he sees fit, as soon as he no longer gets any use, or not the
required use, out of him. But the worker, whose only source of income is
the sale of his labour-power, cannot leave the whole class of buyers, i.e.,
the capitalist class, unless he gives up his own existence. He does not
belong to this or that capitalist, but to the capitalist class; and it
is for him to find his man – i.e., to find a buyer in this capitalist
class.

Before entering more closely upon the relation of capital to wage-labour,
we shall present briefly the most general conditions which come into consideration
in the determination of wages.

Wages, as we have seen, are the price of a certain commodity,
labour-power. Wages, therefore, are determined by the same laws that determine
the price of every other commodity. The question then is, How is the price
of a commodity determined?

By what is the price of a commodity determined?

Wage Labour and Capital Index

Karl Marx

Wage Labour and Capital

## By what is the price of a commodity determined?

By the competition between buyers and sellers, by the relation
of the demand to the supply, of the call to the offer. The competition
by which the price of a commodity is determined is threefold.

The same commodity is offered for sale by various sellers. Whoever
sells commodities of the same quality most cheaply, is sure to drive the
other sellers from the field and to secure the greatest market for himself.
The sellers therefore fight among themselves for the sales, for the market.
Each one of them wishes to sell, and to sell as much as possible, and if
possible to sell alone, to the exclusion of all other sellers. Each one
sells cheaper than the other. Thus there takes place a competition among
the sellers which forces down the price of the commodities offered by them.

But there is also a competition among the buyers; this upon its
side causes the price of the proffered commodities to rise.

Finally, there is competition between the buyers and the sellers:
these wish to purchase as cheaply as possible, those to sell as dearly
as possible. The result of this competition between buyers and sellers
will depend upon the relations between the two above-mentioned camps of
competitors – i.e., upon whether the competition in the army of sellers
is stronger. Industry leads two great armies into the field against each
other, and each of these again is engaged in a battle among its own troops
in its own ranks. The army among whose troops there is less fighting, carries
off the victory over the opposing host.

Let us suppose that there are 100 bales of cotton in the market
and at the same time purchasers for 1,000 bales of cotton. In this case,
the demand is 10 times greater than the supply. Competition among the buyers,
then, will be very strong; each of them tries to get hold of one bale,
if possible, of the whole 100 bales. This example is no arbitrary supposition.
In the history of commerce we have experienced periods of scarcity of cotton,
when some capitalists united together and sought to buy up not 100 bales,
but the whole cotton supply of the world. In the given case, then, one
buyer seeks to drive the others from the field by offering a relatively
higher price for the bales of cotton. The cotton sellers, who perceive
the troops of the enemy in the most violent contention among themselves,
and who therefore are fully assured of the sale of their whole 100 bales,
will beware of pulling one another's hair in order to force down the price
of cotton at the very moment in which their opponents race with one another
to screw it up high. So, all of a sudden, peace reigns in the army of sellers.
They stand opposed to the buyers like one man, fold their arms in philosophic
contentment and their claims would find no limit did not the offers of
even the most importunate of buyers have a very definite limit.

If, then, the supply of a commodity is less than the demand for
it, competition among the sellers is very slight, or there may be none
at all among them. In the same proportion in which this competition decreases,
the competition among the buyers increases. Result: a more or less considerable
rise in the prices of commodities.

It is well known that the opposite case, with the opposite result,
happens more frequently. Great excess of supply over demand; desperate
competition among the sellers, and a lack of buyers; forced sales of commodities
at ridiculously low prices.

But what is a rise, and what a fall of prices? What is a high
and what a low price? A grain of sand is high when examined through a microscope,
and a tower is low when compared with a mountain. And if the price is determined
by the relation of supply and demand, by what is the relation of supply
and demand determined?

Let us turn to the first worthy citizen we meet. He will not hesitate
one moment, but, like Alexander the Great, will cut this metaphysical knot
with his multiplication table. He will say to us: "If the production of
the commodities which I sell has cost me 100 pounds, and out of the sale
of these goods I make 110 pounds – within the year, you understand –
that's an honest, sound, reasonable profit. But if in the exchange I receive
120 or 130 pounds, that's a higher profit; and if I should get as much
as 200 pounds, that would be an extraordinary, and enormous profit." What
is it, then, that serves this citizen as the standard of his profit? The
cost of the production of his commodities. If in exchange for these goods
he receives a quantity of other goods whose production has cost less, he
has lost. If he receives in exchange for his goods a quantity of other
goods whose production has cost more, he has gained. And he reckons the
falling or rising of the profit according to the degree at which the exchange
value of his goods stands, whether above or below his zero – the cost
of production.

We have seen how the changing relation of supply and demand causes
now a rise, now a fall of prices; now high, now low prices. If the price
of a commodity rises considerably owing to a failing supply or a disproportionately
growing demand, then the price of some other commodity must have fallen
in proportion; for of course the price of a commodity only expresses in
money the proportion in which other commodities will be given in exchange
for it. If, for example, the price of a yard of silk rises from two to
three shillings, the price of silver has fallen in relation to the silk,
and in the same way the prices of all other commodities whose prices have
remained stationary have fallen in relation to the price of silk. A large
quantity of them must be given in exchange in order to obtain the same
amount of silk. Now, what will be the consequence of a rise in the price
of a particular commodity? A mass of capital will be thrown into the prosperous
branch of industry, and this immigration of capital into the provinces
of the favored industry will continue until it yields no more than the
customary profits, or, rather until the price of its products, owing to
overproduction, sinks below the cost of production.

Conversely: if the price of a commodity falls below its cost of
production, then capital will be withdrawn from the production of this
commodity. Except in the case of a branch of industry which has become
obsolete and is therefore doomed to disappear, the production of such a
commodity (that is, its supply), will, owing to this flight of capital,
continue to decrease until it corresponds to the demand, and the price
of the commodity rises again to the level of its cost of production; or,
rather, until the supply has fallen below the demand and its price has
risen above its cost of production, for the current price of a commodity
is always either above or below its cost of production.

We see how capital continually emigrates out of the province of
one industry and immigrates into that of another. The high price produces
an excessive immigration, and the low price an excessive emigration.

We could show, from another point of view, how not only the supply,
but also the demand, is determined by the cost of production. But this
would lead us too far away from our subject.

We have just seen how the fluctuation of supply and demand always
bring the price of a commodity back to its cost of production. The actual
price of a commodity, indeed, stands always above or below the cost of
production; but the rise and fall reciprocally balance each other, so
that, within a certain period of time, if the ebbs and flows of the industry
are reckoned up together, the commodities will be exchanged for one another
in accordance with their cost of production. Their price is thus determined
by their cost of production.

The determination of price by the cost of production is not to
be understood in the sense of the bourgeois economists. The economists
say that the average price of commodities equals the cost of production:
that is the law. The anarchic movement, in which the rise is compensated
for by a fall and the fall by a rise, they regard as an accident. We might
just as well consider the fluctuations as the law, and the determination
of the price by cost of production as an accident – as is, in fact, done
by certain other economists. But it is precisely these fluctuations which,
viewed more closely, carry the most frightful devastation in their train,
and, like an earthquake, cause bourgeois society to shake to its very foundations
– it is precisely these fluctuations that force the price to conform to
the cost of production. In the totality of this disorderly movement is
to be found its order. In the total course of this industrial anarchy,
in this circular movement, competition balances, as it were, the one extravagance
by the other.

We thus see that the price of a commodity is indeed determined
by its cost of production, but in such a manner that the periods in which the
price of these commodities rises above the costs of production are balanced
by the periods in which it sinks below the cost of production, and vice
versa. Of course this does not hold good for a single given product of
an industry, but only for that branch of industry. So also it does not
hold good for an individual manufacturer, but only for the whole class
of manufacturers.

The determination of price by cost of production is tantamount
to the determination of price by the labor-time requisite to the production
of a commodity, for the cost of production consists, first of raw materials
and wear and tear of tools, etc., i.e., of industrial products whose production
has cost a certain number of work-days, which therefore represent a certain
amount of labor-time, and, secondly, of direct labor, which is also measured
by its duration.

By what are wages determined?

Wage Labour and Capital Index

Karl Marx

Wage Labour and Capital

## 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 labour-power. Wages will now
rise, now fall, according to the relation of supply and demand, according as
competition shapes itself between the buyers of labour-power, the capitalists,
and the sellers of labour-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 labour-power will be
determined by the cost of production, by the labour-time necessary for
production of this commodity: labour-power.

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

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

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 labour-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.

Here, however, there enters another consideration. The manufacturer who
calculates his cost of production and, in accordance with it, the price of the
product, takes into account the wear and tear of the instruments of labour. If
a machine costs him, for example, 1,000 shillings, and this machine is used up
in 10 years, he adds 100 shillings annually to the price of the commodities, in
order to be able after 10 years to replace the worn-out machine with a new one.
In the same manner, the cost of production of simple labour-power must include
the cost of propagation, by means of which the race of workers is enabled to
multiply itself, and to replace worn-out workers with new ones. The wear and
tear of the worker, therefore, is calculated in the same manner as the wear and
tear of the machine.

Thus, the cost of production of simple labour-power amounts to the cost of
the existence and propagation of the worker. The price of this cost of
existence and propagation constitutes wages. The wages thus determined are
called the minimum of wages. This minimum wage, like the determination of the
price of commodities in general by cost of production, does not hold good for
the single individual, but only for the race. Individual workers, indeed,
millions of workers, do not receive enough to be able to exist and to propagate
themselves; but the wages of the whole working class adjust themselves, within
the limits of their fluctuations, to this minimum.

Now that we have come to an understanding in regard to the most general laws
which govern wages, as well as the price of every other commodity, we can
examine our subject more particularly.

The nature and growth of capital

Wage Labour and Capital Index

Karl Marx

Wage Labour and Capital

## The Nature and Growth of Capital

Capital consists of raw materials, instruments of labour, and means of
subsistence of all kinds, which are employed in producing new raw materials,
new instruments, and new means of subsistence. All these components of capital
are created by labour, products of labour, accumulated labour. Accumulated
labour that serves as a means to new production is capital.

So say the economists.

What is a Negro slave? A man of the black race. The one explanation is
worthy of the other.

A Negro is a Negro. Only under certain conditions does he become a slave. A
cotton-spinning machine is a machine for spinning cotton. Only under certain
conditions does it become capital. Torn away from these conditions, it is as
little capital as gold is itself money, or sugar is the price of sugar.

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. With the
discover of a new instrument of warfare, the firearm, the whole internal
organization of the army was necessarily altered, the relations within which
individuals compose an army and can work as an army were transformed, and the
relation of different armies to another was likewise changed.

We thus see that the social relations within which individuals produce, the
social relations of production, are altered, transformed, with the change and
development of the material means of production, of the forces 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. It is a bourgeois relation
of production, a relation of production of bourgeois society. The means of
subsistence, the instruments of labour, the raw materials, of which capital
consists – have they not been produced and accumulated under given social
conditions, within definite special relations? Are they not employed for new
production, under given special conditions, within definite social relations?
And does not just the definite social character stamp the products which serve
for new production as capital?

Capital consists not only of means of subsistence, instruments of labour,
and raw materials, not only as material products; it consists just as much of
exchange values. All products of which it consists are commodities. Capital,
consequently, 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.

But though every capital is a sum of commodities – i.e., of exchange
values – it does not follow that every sum of commodities, of exchange
values, is capital.

Every sum of exchange values is an exchange value. Each particular exchange
value is a sum of exchange values. For example: a house worth 1,000 pounds is
an exchange value of 1,000 pounds: a piece of paper worth one penny is a sum of
exchange values of 100 1/100ths of a penny. Products which are exchangeable for
others are commodities. The definite proportion in which they are exchangeable
forms their exchange value, or, expressed in money, their price. The quantity
of these products can have no effect on their character as commodities, as
representing an exchange value, as having a certain price. Whether a tree be
large or small, it remains a tree. Whether we exchange iron in pennyweights or
in hundredweights, for other products, does this alter its character: its being
a commodity, or exchange value? According to the quantity, it is a commodity of
greater or of lesser value, of higher or of lower price.

How then does a sum of commodities, of exchange values, become capital?

Thereby, that as an independent social power – i.e., as the power of a
part of society – it preserves itself and multiplies by exchange with
direct, living labour-power.

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 labour over
immediate living labour that stamps the accumulated labour with the character
of capital.

Capital does not consist in the fact that accumulated labour serves living
labour as a means for new production. It consists in the fact that living
labour serves accumulated labour as the means of preserving and multiplying its
exchange value.

Relation of wage-labour to capital

Wage Labour and Capital Index

Karl Marx

Wage Labour and Capital

## Relation of Wage-Labour to Capital

What is it that takes place in the exchange between the capitalist and the
wage-labourer?

The labourer receives means of subsistence in exchange for his labour-power;
the capitalist receives, in exchange for his means of subsistence, labour, the
productive activity of the labourer, the creative force by which the worker not
only replaces what he consumes, but also gives to the accumulated labour a
greater value than it previously possessed. The labourer gets from the
capitalist a portion of the existing means of subsistence. For what purpose do
these means of subsistence serve him? For immediate consumption. But as soon as
I consume means of subsistence, they are irrevocably lost to me, unless I
employ the time during which these means sustain my life in producing new means
of subsistence, in creating by my labour new values in place of the values lost
in consumption. But it is just this noble reproductive power that the labourer
surrenders to the capitalist in exchange for means of subsistence received.
Consequently, he has lost it for himself.

Let us take an example. For one shilling a labourer works all day long in
the fields of a farmer, to whom he thus secures a return of two shillings. The
farmer not only receives the replaced value which he has given to the day
labourer, he has doubled it. Therefore, he has consumed the one shilling that
he gave to the day labourer in a fruitful, productive manner. For the one
shilling he has bought the labour-power of the day-labourer, which creates
products of the soil of twice the value, and out of one shilling makes two. The
day-labourer, on the contrary, receives in the place of his productive force,
whose results he has just surrendered to the farmer, one shilling, which he
exchanges for means of subsistence, which he consumes more or less quickly. The
one shilling has therefore been consumed in a double manner –
reproductively for the capitalist, for it has been exchanged for labour-power,
which brought forth two shillings; unproductively for the worker, for it has
been exchanged for means of subsistence which are lost for ever, and whose
value he can obtain again only by repeating the same exchange with the farmer.
Capital therefore presupposes wage-labour; wage-labour presupposes capital.
They condition each other; each brings the other into existence.

Does a worker in a cotton factory produce only cotton? No. He produces
capital. He produces values which serve anew to command his work and to create
by means of it new values.

Capital can multiply itself only by exchanging itself for labour-power, by
calling wage-labour into life. The labour-power of the wage-labourer 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 labourer 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 labour-power, which, in order to exploit, it must buy. The more
quickly the capital destined for production – the productive capital
– increases, the more prosperous industry is, the more the bourgeoisie
enriches itself, the better business gets, so many more workers does the
capitalist need, so much the dearer does the worker sell himself. The fastest
possible growth of productive capital is, therefore, the indispensable
condition for a tolerable life to the labourer.

But what is growth of productive capital? Growth of the power of accumulated
labour over living labour; growth of the rule of the bourgeoisie over the
working class. When wage-labour 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-labour 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-labourer remains a wage-labourer, his lot is dependent
upon capital. That is what the boasted community of interests between worker
and capitalists amounts to.

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

Let us suppose the most favorable case: if productive capital grows, the
demand for labour grows. It therefore increases the price of labour-power,
wages.

A house may be large or small; as long as the neighboring houses are
likewise small, it satisfies all social requirement for a residence. But let
there arise next to the little house a palace, and the little house shrinks to
a hut. The little house now makes it clear that its inmate has no social
position at all to maintain, or but a very insignificant one; and however high
it may shoot up in the course of civilization, if the neighboring palace rises
in equal or even in greater measure, the occupant of the relatively little
house will always find himself more uncomfortable, more dissatisfied, more
cramped within his four walls.

An appreciable rise in wages presupposes a rapid growth of productive
capital. Rapid growth of productive capital calls forth just as rapid a growth
of wealth, of luxury, of social needs and social pleasures. Therefore, although
the pleasures of the labourer have increased, the social gratification which
they afford has fallen in comparison with the increased pleasures of the
capitalist, which are inaccessible to the worker, in comparison with the stage
of development of society in general. Our wants and pleasures have their origin
in society; we therefore measure them in relation to society; we do not measure
them in relation to the objects which serve for their gratification. Since they
are of a social nature, they are of a relative nature.

But wages are not at all determined merely by the sum of commodities for
which they may be exchanged. Other factors enter into the problem. What the
workers directly receive for their labour-power is a certain sum of money. Are
wages determined merely by this money price?

In the 16th century, the gold and silver circulation in Europe increased in
consequence of the discovery of richer and more easily worked mines in America.
The value of gold and silver, therefore, fell in relation to other commodities.
The workers received the same amount of coined silver for their labour-power as
before. The money price of their work remained the same, and yet their wages
had fallen, for in exchange for the same amount of silver they obtained a
smaller amount of other commodities. This was one of the circumstances which
furthered the growth of capital, the rise of the bourgeoisie, in the 18th
century.

Let us take another case. In the winter of 1847, in consequence of bad
harvest, the most indispensable means of subsistence – grains, meat,
butter, cheese, etc. – rose greatly in price. Let us suppose that the
workers still received the same sum of money for their labour-power as before.
Did not their wages fall? To be sure. For the same money they received in
exchange less bread, meat, etc. Their wages fell, not because the value of
silver was less, but because the value of the means of subsistence had
increased.

Finally, let us suppose that the money price of labour-power remained the
same, while all agricultural and manufactured commodities had fallen in price
because of the employment of new machines, of favorable seasons, etc. For the
same money the workers could now buy more commodities of all kinds. Their wages
have therefore risen, just because their money value has not changed.

The money price of labour-power, the nominal wages, do not therefore
coincide with the actual or real wages – i.e., with the amount of
commodities which are actually given in exchange for the wages. If then we
speak of a rise or fall of wages, we have to keep in mind not only the money
price of labour-power, the nominal wages, but also the real wages.

But neither the nominal wages – i.e., the amount of money for which
the labourer sells himself to the capitalist – nor the real wages –
i.e., the amount of commodities which he can buy for this money –
exhausts the relations which are comprehended in the term wages.

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.

Real wages express the price of labour-power in relation to the price of
commodities; relative wages, on the other hand, express the share of immediate
labour in the value newly created by it, in relation to the share of it which
falls to accumulated labour, to capital.

The general law that determines the rise
and fall of wages and profit

Wage Labour and Capital Index

Karl Marx

Wage Labour and Capital

## The General Law that Determines the Rise and Fall of Wages and Profits

We have said: "Wages are not a share of the worker in the commodities
produced by him. Wages are that part of already existing commodities with which
the capitalist buys a certain amount of productive labor-power." But the
capitalist must replace these wages out of the price for which he sells the
product made by the worker; he must so replace it that, as a rule, there
remains to him a surplus above the cost of production expended by him, that is,
he must get a profit.

The selling price of the commodities produced by the worker is divided, from
the point of view of the capitalist, into three parts:

First, the replacement of the price
of the raw materials advanced by him, in addition to the replacement of the
wear and tear of the tools, machines, and other instruments of labor likewise
advanced by him;

Second, the replacement of the wages
advanced; and

Third, the surplus leftover –
i.e., the profit of the capitalist.

While the first part merely replaces previously existing values,
it is evident that the replacement of the wages and the surplus (the profit of
capital) are as a whole taken out of the new value, which is produced by the
labor of the worker and added to the raw materials. And in this sense we can
view wages as well as profit, for the purpose of comparing them with each
other, as shares in the product of the worker.

Real wages may remain the same, they may even rise, nevertheless the
relative wages may fall. Let us suppose, for instance, that all means of
subsistence have fallen 2/3rds in price, while the day's wages have fallen but
1/3rd – for example, from three to two shillings. Although the worker can
now get a greater amount of commodities with these two shillings than he
formerly did with three shillings, yet his wages have decreased in proportion
to the gain of the capitalist. The profit of the capitalist – the
manufacturer's for instance – has increased one shilling, which means
that for a smaller amount of exchange values, which he pays to the worker, the
latter must produce a greater amount of exchange values than before. The share
of capitals in proportion to the share of labour has risen. The distribution of
social wealth between capital and labour has become still more unequal. The
capitalist commands a greater amount of labour with the same capital. The power
of the capitalist class over the working class has grown, the social position
of the worker has become worse, has been forced down still another degree below
that of the capitalist.

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 labour (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.

It might perhaps be argued that the capitalist class can gain by an
advantageous exchange of his products with other capitalists, by a rise in the
demand for his commodities, whether in consequence of the opening up of new
markets, or in consequence of temporarily increased demands in the old market,
and so on; that the profit of the capitalist, therefore, may be multiplied by
taking advantage of other capitalists, independently of the rise and fall of
wages, of the exchange value of labour-power; or that the profit of the
capitalist may also rise through improvements in the instruments of labour, new
applications of the forces of nature, and so on.

But in the first place it must be admitted that the result remains the same,
although brought about in an opposite manner. Profit, indeed, has not risen
because wages have fallen, but wages have fallen because profit has risen. With
the same amount of another man's labour the capitalist has bought a larger
amount of exchange values without having paid more for the labour on that
account – i.e., the work is paid for less in proportion to the net gain
which it yields to the capitalist.

In the second place, it must be borne in mind that, despite the fluctuations
in the prices of commodities, the average price of every commodity, the
proportion in which it exchanges for other commodities, is determined by its
cost of production. The acts of overreaching and taking advantage of one
another within the capitalist ranks necessarily equalize themselves. The
improvements of machinery, the new applications of the forces of nature in the
service of production, make it possible to produce in a given period of time,
with the same amount of labour and capital, a larger amount of products, but in
no wise a larger amount of exchange values. If by the use of the
spinning-machine I can furnish twice as much yarn in an hour as before its
invention – for instance, 100 pounds instead of 50 pounds – in the
long run I receive back, in exchange for this 100 pounds no more commodities
than I did before for 50; because the cost of production has fallen by 1/2, or
because I can furnish double the product at the same cost.

Finally, in whatsoever proportion the capitalist class, whether of one
country or of the entire world-market, distribute the net revenue of production
among themselves, the total amount of this net revenue always consists
exclusively of the amount by which accumulated labour has been increased from
the proceeds of direct labour. This whole amount, therefore, grows in the same
proportion in which labour augments capital – i.e., in the same
proportion in which profit rises as compared with wages.

The interests of capital and wage-labour
are diametrically opposed...

Wage Labour and Capital Index

Karl Marx

Wage Labour and Capital

## The Interests of Capital and Wage-Labour are diametrically opposed

### Effect of growth of productive Capital on Wages

We thus see that, even if we keep ourselves within the relation of capital
and wage-labour, the interests of capitals and the interests of wage-labour are
diametrically opposed to each other.

A rapid growth of capital is synonymous with a rapid growth of profits.
Profits can grow rapidly only when the price of labour – the relative
wages – decrease just as rapidly. Relative wages may fall, although real
wages rise simultaneously with nominal wages, with the money value of labour,
provided only that the real wage does not rise in the same proportion as the
profit. If, for instance, in good business years wages rise 5 per cent, while
profits rise 30 per cent, the proportional, the relative wage has not
increased, but decreased.

If, therefore, 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
labour, a greater dependence of labour 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.

We have thus seen that even the most favorable situation for the working
class, namely, the most rapid growth of capital, however much it may improve
the material life of the worker, does not abolish the antagonism between his
interests and the interests of the capitalist. Profit and wages remain as
before, in inverse proportion.

If capital grows rapidly, wages may rise, but the profit of capital rises
disproportionately faster. The material position of the worker has improved,
but at the cost of his social position. The social chasm that separates him
from the capitalist has widened.

Finally, to say that "the most favorable condition for wage-labour is the
fastest possible growth of productive capital", is the same as to say: the
quicker the working class multiplies and augments the power inimical to it
– the wealth of another which lords over that class – the more
favorable will be the conditions under which it will be permitted to toil anew
at the multiplication of bourgeois wealth, at the enlargement of the power of
capital, content thus to forge for itself the golden chains by which the
bourgeoisie drags it in its train.

Growth of productive capital and rise of wages, are they really so
indissolubly united as the bourgeois economists maintain? We must not believe
their mere words. We dare not believe them even when they claim that the fatter
capital is the more will its slave be pampered. The bourgeoisie is too much
enlightened, it keeps its accounts much too carefully, to share the prejudices
of the feudal lord, who makes an ostentatious display of the magnificence of
his retinue. The conditions of existence of the bourgeoisie compel it to attend
carefully to its bookkeeping. We must therefore examine more closely into the
following question:

In what manner does the growth of productive capital affect wages?

If as a whole, the productive capital of bourgeois society grows, there
takes place a more many-sided accumulation of labour. The individual capitals
increase in number and in magnitude. The multiplications of individual capitals
increases the competition among capitalists. The increasing magnitude of
increasing capitals provides the means of leading more powerful armies of
workers with more gigantic instruments of war upon the industrial battlefield.

The one capitalist can drive the other from the field and carry off his
capital only by selling more cheaply. In order to sell more cheaply without
ruining himself, he must produce more cheaply – i.e., increase the
productive forces of labour as much as possible.

But the productive forces of labour is increased above all by a greater
division of labour and by a more general introduction and constant improvement
of machinery. The larger the army of workers among whom the labour is
subdivided, the more gigantic the scale upon which machinery is introduced, the
more in proportion does the cost of production decrease, the more fruitful is
the labour. And so there arises among the capitalists a universal rivalry for
the increase of the division of labour and of machinery and for their
exploitation upon the greatest possible scale.

If, now, by a greater division of labour, by the application and improvement
of new machines, by a more advantageous exploitation of the forces of nature on
a larger scale, a capitalist has found the means of producing with the same
amount of labour (whether it be direct or accumulated labour) a larger amount
of products of commodities than his competitors – if, for instance, he
can produce a whole yard of linen in the same labour-time in which his
competitors weave half-a-yard – how will this capitalist act?

He could keep on selling half-a-yard of linen at old market price; but this
would not have the effect of driving his opponents from the field and enlarging
his own market. But his need of a market has increased in the same measure in
which his productive power has extended. The more powerful and costly means of
production that he has called into existence enable him, it is true, to sell
his wares more cheaply, but they compel him at the same time to sell more
wares, to get control of a very much greater market for his commodities;
consequently, this capitalist will sell his half-yard of linen more cheaply
than his competitors.

But the capitalist will not sell the whole yard so cheaply as his
competitors sell the half-yard, although the production of the whole yard costs
him no more than does that of the half-yard to the others. Otherwise, he would
make no extra profit, and would get back in exchange only the cost of
production. He might obtain a greater income from having set in motion a larger
capital, but not from having made a greater profit on his capital than the
others. Moreover, he attains the object he is aiming at if he prices his goods
only a small percentage lower than his competitors. He drives them off the
field, he wrests from them at least part of their market, by underselling them.

And finally, let us remember that the current price always stands either
above or below the cost of production, according as the sale of a commodity
takes place in the favorable or unfavorable period of the industry. According
as the market price of the yard of linen stands above or below its former cost
of production, will the percentage vary at which the capitalist who has made
use of the new and more fruitful means of production sell above his real cost
of production.

But the privilege of our capitalist is not of long duration. Other competing
capitalists introduce the same machines, the same division of labour, and
introduce them upon the same or even upon a greater scale. And finally this
introduction becomes so universal that the price of the linen is lowered not
only below its old, but even below its new cost of production.

The capitalists therefore find themselves, in their mutual relations, in the
same situation in which they were before the introduction of the new means of
production; and if they are by these means enabled to offer double the product
at the old price, they are now forced to furnish double the product for less
than the old price. Having arrived at the new point, the new cost of
production, the battle for supremacy in the market has to be fought out anew.
Given more division of labour and more machinery, and there results a greater
scale upon which division of labour and machinery are exploited. And
competition again brings the same reaction against this result.

Effect of capitalist competition on
the...

Wage Labour and Capital Index

Karl Marx

Wage Labour and Capital

## Effect of Capitalist Competition on the Capitalist Class the Middle Class and the Working Class

We thus see how the method of production and the means of production are
constantly enlarged, revolutionized, how division of labour necessarily draws
after it greater division of labour, the employment of machinery greater
employment of machinery, work upon a large scale work upon a still greater
scale. This is the law that continually throws capitalist production out of its
old ruts and compels capital to strain ever more the productive forces of
labour for the very reason that it has already strained them – the law
that grants it no respite, and constantly shouts in its ear: March! march! This
is no other law than that which, within the periodical fluctuations of
commerce, necessarily adjusts the price of a commodity to its cost of
production.

No matter how powerful the means of production which a capitalist may bring
into the field, competition will make their adoption general; and from the
moment that they have been generally adopted, the sole result of the greater
productiveness of his capital will be that he must furnish at the same price,
10, 20, 100 times as much as before. But since he must find a market for,
perhaps, 1,000 times as much, in order to outweigh the lower selling price by
the greater quantity of the sale; since now a more extensive sale is necessary
not only to gain a greater profit, but also in order to replace the cost of
production (the instrument of production itself grows always more costly, as we
have seen), and since this more extensive sale has become a question of life
and death not only for him, but also for his rivals, the old struggle must
begin again, and it is all the more violent the more powerful the means of
production already invented are. The division of labour and the application of
machinery will therefore take a fresh start, and upon an even greater scale.

Whatever be the power of the means of production which are employed,
competition seeks to rob capital of the golden fruits of this power by reducing
the price of commodities to the cost of production; in the same measure in
which production is cheapened - i.e., in the same measure in which more can be
produced with the same amount of labour – it compels by a law which is
irresistible a still greater cheapening of production, the sale of ever greater
masses of product for smaller prices. Thus the capitalist will have gained
nothing more by his efforts than the obligation to furnish a greater product in
the same labour-time; in a word, more difficult conditions for the profitable
employment of his capital. While competition, therefore, constantly pursues him
with its law of the cost of production and turns against himself every weapon
that he forges against his rivals, the capitalist continually seeks to get the
best of competition by restlessly introducing further subdivision of labour and
new machines, which, though more expensive, enable him to produce more cheaply,
instead of waiting until the new machines shall have been rendered obsolete by
competition.

If we now conceive this feverish agitation as it operates in the market of
the whole world, we shall be in a position to comprehend how the growth,
accumulation, and concentration of capital bring in their train an ever more
detailed subdivision of labour, an ever greater improvement of old machines,
and a constant application of new machine – a process which goes on
uninterruptedly, with feverish haste, and upon an ever more gigantic scale.

But what effect do these conditions, which are inseparable from the growth
of productive capital, have upon the determination of wages?

The greater division of labour enables one labourer to accomplish the work
of five, 10, or 20 labourers; it therefore increases competition among the
labourers fivefold, tenfold, or twentyfold. The labourers compete not only by
selling themselves one cheaper than the other, but also by one doing the work
of five, 10, or 20; and they are forced to compete in this manner by the
division of labour, which is introduced and steadily improved by capital.

Furthermore, to the same degree in which the division of labour increases,
is the labour simplified. The special skill of the labourer becomes worthless.
He becomes transformed into a simple monotonous force of production, with
neither physical nor mental elasticity. His work becomes accessible to all;
therefore competitors press upon him from all sides. Moreover, it must be
remembered that the more simple, the more easily learned the work is, so much
the less is its cost to production, the expense of its acquisition, and so much
the lower must the wages sink – for, like the price of any other
commodity, they are determined by the cost of production. Therefore, in the
same manner in which labour becomes more unsatisfactory, more repulsive, do
competition increase and wages decrease.

The labourer seeks to maintain the total of his wages for a given time by
performing more labour, 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 labour. 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.

Machinery produces the same effects, but upon a much larger scale. It
supplants skilled labourers 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.

We have hastily sketched in broad outlines the industrial war of capitalists
among themselves. This war has the peculiarity that the battles in it are won
less by recruiting than by discharging the army of workers. The generals (the
capitalists) vie with one another as to who can discharge the greatest number
of industrial soldiers.

The economists tell us, to be sure, that those labourers who have been
rendered superfluous by machinery find new venues of employment. They dare not
assert directly that the same labourers that have been discharged find
situations in new branches of labour. Facts cry out too loudly against this
lie. Strictly speaking, they only maintain that new means of employment will be
found for other sections of the working class; for example, for that portion of
the young generation of labourers who were about to enter upon that branch of
industry which had just been abolished. Of course, this is a great satisfaction
to the disabled labourers. There will be no lack of fresh exploitable blood and
muscle for the Messrs. Capitalists – the dead may bury their dead. This
consolation seems to be intended more for the comfort of the capitalists
themselves than their labourers. If the whole class of the wage-labourer were
to be annihilated by machinery, how terrible that would be for capital, which,
without wage-labour, ceases to be capital!

But even if we assume that all who are directly forced out of employment by
machinery, as well as all of the rising generation who were waiting for a
chance of employment in the same branch of industry, do actually find some new
employment – are we to believe that this new employment will pay as high
wages as did the one they have lost? If it did, it would be in contradiction to
the laws of political economy. We have seen how modern industry always tends to
the substitution of the simpler and more subordinate employments for the higher
and more complex ones. How, then, could a mass of workers thrown out of one
branch of industry by machinery find refuge in another branch, unless they were
to be paid more poorly?

An exception to the law has been adduced, namely, the workers who are
employed in the manufacture of machinery itself. As soon as there is in
industry a greater demand for and a greater consumption of machinery, it is
said that the number of machines must necessarily increase; consequently, also,
the manufacture of machines; consequently, also, the employment of workers in
machine manufacture; and the workers employed in this branch of industry are
skilled, even educated, workers.

Since the year 1840 this assertion, which even before that date was only
half-true, has lost all semblance of truth; for the most diverse machines are
now applied to the manufacture of the machines themselves on quite as extensive
a scale as in the manufacture of cotton yarn, and the labourers employed in
machine factories can but play the role of very stupid machines alongside of
the highly ingenious machines.

But in place of the man who has been dismissed by the machine, the factory
may employ, perhaps, three children and one woman! And must not the wages of
the man have previously sufficed for the three children and one woman? Must not
the minimum wages have sufficed for the preservation and propagation of the
race? What, then, do these beloved bourgeois phrases prove? Nothing more than
that now four times as many workers' lives are used up as there were
previously, in order to obtain the livelihood of one working family.

To sum up: the more productive capital grows, the more it extends the
division of labour and the application of machinery; the more the division of
labour and the application of machinery extend, the more does competition
extend among the workers, the more do their wages shrink together.

In addition, the working class is also recruited from the higher strata of
society; a mass of small business men and of people living upon the interest of
their capitals is precipitated into the ranks of the working class, and they
will have nothing else to do than to stretch out their arms alongside of the
arms of the workers. Thus the forest of outstretched arms, begging for work,
grows ever thicker, while the arms themselves grow every leaner.

It is evident that the small manufacturer cannot survive in a struggle in
which the first condition of success is production upon an ever greater scale.
It is evident that the small manufacturers and thereby increasing the number of
candidates for the proletariat – all this requires no further
elucidation.

Finally, in the same measure in which the capitalists are compelled, by the
movement described above, to exploit the already existing gigantic means of
production on an ever-increasing scale, and for this purpose to set in motion
all the mainsprings of credit, in the same measure do they increase the
industrial earthquakes, in the midst of which the commercial world can preserve
itself only by sacrificing a portion of its wealth, its products, and even its
forces of production, to the gods of the lower world – in short, the
crises increase. They become more frequent and more violent, if for no other
reason, than for this alone, that in the same measure in which the mass of
products grows, and therefore the needs for extensive markets, in the same
measure does the world market shrink ever more, and ever fewer markets remain
to be exploited, since every previous crisis has subjected to the commerce of
the world a hitherto unconquered or but superficially exploited market.

But capital not only lives upon labour. 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-labour.

Wage Labour and Capital Index

Marx/Engels Works Archive