## Preliminary

CITIZENS,

Before entering into the subject-matter, allow me to make a few
preliminary remarks. There reigns now on the Continent a real epidemic of
strikes, and a general clamour for a rise of wages. The question will turn up
at our Congress. You, as the head of the International Association, ought to
have settled convictions upon this paramount question. For my own part, I
considered it therefore my duty to enter fully into the matter, even at the
peril of putting your patience to a severe test.

Another preliminary remark I have to make in regard to Citizen Weston. He
has not only proposed to you, but has publicly defended, in the interest of the
working class, as he thinks, opinions he knows to be most unpopular with the
working class. Such an exhibition of moral courage all of us must highly
honour. I hope that, despite the unvarnished style of my paper, at its
conclusion he will find me agreeing with what appears to me the just idea lying
at the bottom of his theses, which, however, in their present form, I cannot
but consider theoretically false and practically dangerous.

I shall now at once proceed to the business before us.

## I. Production and Wages

Citizen Weston's argument rested, in fact, upon two premises:
firstly, the amount of national production is a fixed thing, a constant
quantity or magnitude, as the mathematicians would say; secondly, that the
amount of real wages, that is to say, of wages as measured by the quantity of
the commodities they can buy, is a fixed amount, a constant magnitude.

Now, his first assertion is evidently erroneous. Year after year you will
find that the value and mass of production increase, that the productive powers
of the national labour increase, and that the amount of money necessary to
circulate this increasing production continuously changes. What is true at the
end of the year, and for different years compared with each other, is true for
every average day of the year. The amount or magnitude of national production
changes continuously. It is not a constant but a variable magnitude, and apart
from changes in population it must be so, because of the continuous change in
the accumulation of capital and the productive powers of labour. It is
perfectly true that if a rise in the general rate of wages should take place
today, that rise, whatever its ulterior effects might be, would, by itself, not
immediately change the amount of production. It would, in the first instance,
proceed from the existing state of things. But if before the rise of wages the
national production was variable, and not fixed, it will continue to be
variable and not fixed after the rise of wages.

But suppose the amount of national production to be constant instead of
variable. Even then, what our friend Weston considers a logical conclusion
would still remain a gratuitous assertion. If I have a given number, say eight,
the absolute limits of this number do not prevent its parts from changing their
relative limits. If profits were six and wages two, wages might increase to six
and profits decrease to two, and still the total amount remain eight. The fixed
amount of production would by no means prove the fixed amount of wages. How
then does our friend Weston prove this fixity? By asserting it.

But even conceding him his assertion, it would cut both ways, while he
presses it only in one direction. If the amount of wages is a constant
magnitude, then it can be neither increased nor diminished. If then, in
enforcing a temporary rise of wages, the working men act foolishly, the
capitalists, in enforcing a temporary fall of wages, would act not less
foolishly. Our friend Weston does not deny that, under certain circumstances,
the working men can enforce a rise of wages, but their amount being
naturally fixed, there must follow a reaction. On the other hand, he knows also
that the capitalists can enforce a fall of wages, and, indeed,
continuously try to enforce it. According to the principle of the constancy of
wages, a reaction ought to follow in this case not less than in the former. The
working men, therefore, reacting against the attempt at, or the act of,
lowering wages, would act rightly. They would, therefore, act rightly in
enforcing a rise of wages, because every reaction against the
lowering of wages is an action for raising wages. According to Citizen
Weston's own principle of the constancy of wages, the working men
ought, therefore, under certain circumstances, to combine and struggle for a
rise of wages. If he denies this conclusion, he must give up the premise from
which it flows. He must not say that the amount of wages is a constant
quantity, but that, although it cannot and must not rise, it can
and must fall, whenever capital pleases to lower it. If the capitalist
pleases to feed you upon potatoes instead of upon meat, and upon oats instead
of upon wheat, you must accept his will as a law of political economy, and
submit to it. If in one country the rate of wages is higher than in another, in
the United States, for example, than in England, you must explain this
difference in the rate of wages by a difference between the will of the
American capitalist and the will of the English capitalist, a method which
would certainly very much simplify, not only the study of economic phenomena,
but of all other phenomena.

But even then, we might ask, why the will of the American
capitalist differs from the will of the English capitalist? And to answer the
question you must go beyond the domain of will. A person may tell me
that God wills one thing in France, and another thing in England. If I summon
him to explain this duality of will, he might have the brass to answer me that
God wills to have one will in France and another will in England. But our
friend Weston is certainly the last man to make an argument of such a complete
negation of all reasoning.

The will of the capitalist is certainly to take as much as
possible. What we have to do is not to talk about his will, but to
enquire into his power, the limits of that power, and the
character of those limits.

## II. Production, Wages, Profits

The address Citizen Weston read to us might have been compressed
into a nutshell.

All his reasoning amounted to this: If the working class forces the
capitalist class to pay five shillings instead of four shillings in the shape
of money wages, the capitalist will return in the shape of commodities four
shillings' worth instead of five shillings' worth. The working class would have
to pay five shillings for what, before the rise of wages, they bought with four
shillings. But why is this the case? Why does the capitalist only return four
shillings' worth for five shillings? Because the amount of wages is fixed. By
why is it fixed at four shillings' worth of commodities? Why not at three, or
two, or any other sum? If the limit of the amount of wages is settled by an
economical law, independent alike of the will of the capitalist and the will of
the working man, the first thing Citizen Weston had to do was to state that law
and prove it. He ought then, moreover, to have proved that the amount of wages
actually paid at every given moment always corresponds exactly to the necessary
amount of wages, and never deviates from it. If, on the other hand, the given
limit of the amount of wages is founded on the mere will of the
capitalist, or the limits of his avarice, it is an arbitrary limit. There is
nothing necessary in it. It may be changed by the will of the
capitalist, and may, therefore, be changed against his will.

Citizen Weston illustrated his theory by telling you that a bowl contains a
certain quantity of soup, to be eaten by a certain number of persons, an
increase in the broadness of the spoons would produce no increase in the amount
of soup. He must allow me to find this illustration rather spoony. It reminded
me somewhat of the simile employed by Menenius Agrippa. When the Roman
plebeians struck against the Roman patricians, the patrician Agrippa told them
that the patrician belly fed the plebeian members of the body politic. Agrippa
failed to show that you feed the members of one man by filling the belly of
another. Citizen Weston, on his part, has forgotten that the bowl from which
the workmen eat is filled with the whole produce of national labour, and that
what prevents them fetching more out of it is neither the narrowness of the
bowl nor the scantiness of its contents, but only the smallness of their
spoons.

By what contrivance is the capitalist enabled to return four shillings'
worth for five shillings? By raising the price of the commodity he sells. Now,
does a rise and more generally a change in the prices of commodities, do the
prices of commodities themselves, depend on the mere will of the capitalist? Or
are, on the contrary, certain circumstances wanted to give effect to that will?
If not, the ups and downs, the incessant fluctuations of market prices, become
an insoluble riddle.

As we suppose that no change whatever has taken place either in the
productive powers of labour, or in the amount of capital and labour employed,
or in the value of the money wherein the values of products are estimated, but
only a change in the rate of wages, how could that rise of
wages affect the prices of commodities? Only by affecting the
actual proportion between the demand for, and the supply of these
commodities.

It is perfectly true that, considered as a whole, the working class spends,
and must spend, its income upon necessaries. A general rise in the
rate of wages would, therefore, produce a rise in the demand for, and
consequently in the market prices of necessaries. The capitalists who
produce these necessaries would be compensated for the risen wages by the
rising market prices of their commodities. But how with the other capitalists
who do not produce necessaries? And you must not fancy them a small
body. If you consider that two-thirds of the national produce are consumed by
one-fifth of the population — a member of the House of Commons stated it
recently to be but one-seventh of the population — you will understand
what an immense proportion of the national produce must be produced in the
shape of luxuries, or be exchanged for luxuries, and what an immense
amount of the necessaries themselves must be wasted upon flunkeys, horses,
cats, and so forth, a waste we know from experience to become always much
limited with the rising prices of necessaries.

Well, what would be the position of those capitalists who do not
produce necessaries? For the fall in the rate of profit, consequent
upon the general rise of wages, they could not compensate themselves by a
rise in the price of their commodities, because the demand for those
commodities would not have increased. Their income would have decreased, and
from this decreased income they would have to pay more for the same amount of
higher-priced necessaries. But this would not be all. As their income had
diminished they would have less to spend upon luxuries, and therefore their
mutual demand for their respective commodities would diminish. Consequent upon
this diminished demand the prices of their commodities would fall. In these
branches of industry, therefore, the rate of profit would fall, not
only in simple proportion to the general rise in the rate of wages, but in the
compound ratio of the general rise of wages, the rise in the prices of
necessaries, and the fall in the prices of luxuries.

What would be the consequence of this difference in the rates of
profit for capitals employed in the different branches of industry? Why,
the consequence that generally obtains whenever, from whatever reason, the
average rate of profit comes to differ in different spheres of
production. Capital and labour would be transferred from the less remunerative
to the more remunerative branches; and this process of transfer would go on
until the supply in the one department of industry would have risen
proportionately to the increased demand, and would have sunk in the other
departments according to the decreased demand. This change effected, the
general rate of profit would again be equalized in the different
branches. As the whole derangement originally arose from a mere change in the
proportion of the demand for, and supply of, different commodities, the cause
ceasing, the effect would cease, and PRICES would return to their former level
and equilibrium. Instead of being limited to some branches of industry, the
fall in the rate of profit consequent upon the rise of wages would have
become general. According to our supposition, there would have taken place no
change in the productive powers of labour, nor in the aggregate amount of
production, but that given amount of production would have changed its
form. A greater part of the produce would exist in the shape of
necessaries, a lesser part in the shape of luxuries, or what comes to the same,
a lesser part would be exchanged for foreign luxuries, and be consumed in its
original form, or, what again comes to the same, a greater part of the native
produce would be exchanged for foreign necessaries instead of for luxuries. The
general rise in the rate of wages would, therefore, after a temporary
disturbance of market prices, only result in a general fall of the rate of
profit without any permanent change in the prices of commodities. If I am told
that in the previous argument I assume the whole surplus wages to be spent upon
necessaries, I answer that I have made the supposition most advantageous to the
opinion of Citizen Weston. If the surplus wages were spent upon articles
formerly not entering into the consumption of the working men, the real
increase of their purchasing power would need no proof. Being, however, only
derived from an advance of wages, that increase of their purchasing power must
exactly correspond to the decrease of the purchasing power of the capitalists.
The aggregate demand for commodities would, therefore, not
increase, but the constituent parts of that demand would
change. The increasing demand on the one side would be counterbalanced
by the decreasing demand on the other side. Thus the aggregate demand remaining
stationary, no change whatever could take place in the market prices of
commodities. You arrive, therefore, at this dilemma: Either the surplus wages
are equally spent upon all articles of consumption — then the expansion
of demand on the part of the working class must be compensated by the
contraction of demand on the part of the capitalist class — or the
surplus wages are only spent upon some articles whose market prices will
temporarily rise. The consequent rise in the rate of profit in some, and the
consequent fall in the rate of profit in other branches of industry will
produce a change in the distribution of capital and labour, going on until the
supply is brought up to the increased demand in the one department of industry,
and brought down to the diminished demand in the other departments of industry.
On the one supposition there will occur no change in the prices of commodities.
On the other supposition, after some fluctuations of market prices, the
exchangeable values of commodities will subside to the former level. On both
suppositions the general rise in the rate of wages will ultimately result in
nothing else but a general fall in the rate of profit.

To stir up your powers of imagination Citizen Weston requested you to think
of the difficulties which a general rise of English agricultural wages from
nine shillings to eighteen shillings would produce. Think, he exclaimed, of the
immense rise in the demand for necessaries, and the consequent fearful rise in
their prices! Now, all of you know that the average wages of the American
agricultural labourer amount to more than double that of the English
agricultural labourer, although the prices of agricultural produce are lower in
the United States than in the United Kingdom, although the general relations of
capital and labour obtain in the United States the same as in England, and
although the annual amount of production is much smaller in the United States
than in England. Why, then, does our friend ring this alarm bell? Simply to
shift the real question before us. A sudden rise of wages from nine shillings
to eighteen shillings would be a sudden rise to the amount of 100 percent. Now,
we are not at all discussing the question whether the general rate of wages in
England could be suddenly increased by 100 percent. We have nothing at all to
do with the magnitude of the rise, which in every practical instance
must depend on, and be suited to, given circumstances. We have only to inquire
how a general rise in the rate of wages, even if restricted to one percent,
will act.

Dismissing friend Weston's fancy rise of 100 percent, I propose calling your
attention to the real rise of wages that took place in Great Britain from 1849
to 1859.

You are all aware of the Ten Hours Bill, or rather Ten-and-a-half Hours
Bill, introduced since 1848. This was one of the greatest economical changes we
have witnessed. It was a sudden and compulsory rise of wages, not in some local
trades, but in the leading industrial branches by which England sways the
markets of the world. It was a rise of wages under circumstances singularly
unpropitious. Dr. Ure, Professor Senior, and all the other official economical
mouthpieces of the middle class, [The aristocracy was the
upper class of Great Britain, while the capitalists composed what was known to
Marx as the middle class] proved, and I must say upon much
stronger grounds than those of our friend Weston, that it would sound the
death-knell of English industry. They proved that it not only amounted to a
simple rise of wages, but to a rise of wages initiated by, and based upon, a
diminution of the quantity of labour employed. They asserted that the twelfth
hour you wanted to take from the capitalist was exactly the only hour from
which he derived his profit. They threatened a decrease of accumulation, rise
of prices, loss of markets, stinting of production, consequent reaction upon
wages, ultimate ruin. In fact, they declared Maximillian Robespierre's Maximum
Laws[1] to be a small affair
compared to it; and they were right in a certain sense. Well, what was the
result? A rise in the money wages of the factory operatives, despite the
curtailing of the working day, a great increase in the number of factory hands
employed, a continuous fall in the prices of their products, a marvellous
development in the productive powers of their labour, an unheard-of progressive
expansion of the markets for their commodities. In Manchester, at the meeting,
in 1860, of the Society for the Advancement of Science, I myself heard Mr.
Newman confess that he, Dr. Ure, Senior, and all other official propounders of
economical science had been wrong, while the instinct of the people had been
right. I mention Mr. W. Newman, not Professor Francis Newman, because he
occupies an eminent position in economical science, as the contributor to, and
editor of, Mr. Thomas Tooke's History Of Prices, that magnificent work
which traces the history of prices from 1793 to 1856. If our friend Weston's
fixed idea of a fixed amount of wages, a fixed amount of production, a fixed
degree of the productive power of labour, a fixed and permanent will of the
capitalist, and all his other fixedness and finality were correct, Professor
Senior's woeful forebodings would been right, and Robert Owen[2], who already in 1816 proclaimed a
general limitation of the working day the first preparatory step to the
emancipation of the working class, and actually in the teeth of the general
prejudice inaugurated it on his own hook in his cotton factory at New Lanark,
would have been wrong.

In the very same period during which the introduction of the Ten Hours Bill,
and the rise of wages consequent upon it, occurred, there took place in Great
Britain, for reasons which it would be out of place to enumerate here, a
general rise in agricultural wages. Although it is not required for my
immediate purpose, in order not to mislead you, I shall make some preliminary
remarks.

If a man got two shillings weekly wages, and if his wages rose to four
shillings, the rate of wages would have risen by 100 per cent. This
would seem a very magnificent thing if expressed as a rise in the rate of
wages, although the actual amount of wages, four shillings
weekly, would still remain a wretchedly small, a starvation pittance. You must
not, therefore, allow yourselves to be carried away by the high sounding per
cents in rate of wages. You must always ask: What was the
original amount?

Moreover, you will understand, that if there were ten men receiving each 2s.
per week, five men receiving each 5s., and five men receiving 11s. weekly, the
twenty men together would receive 100s., or £5, weekly. If then a rise,
say by 20 per cent, upon the aggregate sum of their weekly wages took
place, there would be an advance from £5 to £6. Taking the average,
we might say that the general rate of wages had risen by 20 per cent,
although, in fact, the wages of the ten men had remained stationary, the wages
of the one lot of five men had risen from 5s. to 6s. only, and the wages of the
other lot of five from 55s. to 70s.[3] One half of the men would not have improved at all
their position, one quarter would have improved it in an imperceptible degree,
and only one quarter would have bettered it really. Still, reckoning by the
average, the total amount of the wages of those twenty men would have
increased by 25 per cent, and as far as the aggregate capital that employs
them, and the prices of the commodities they produce, are concerned, it would
be exactly the same as if all of them had equally shared in the average rise of
wages. In the case of agricultural labour, the standard wages being very
different in the different counties of England and Scotland, the rise affected
them very unequally.

Lastly, during the period when that rise of wages took place counteracting
influences were at work such as the new taxes consequent upon the Russian war,
the extensive demolition of the dwelling-houses of the agricultural labourers,
and so forth. Having premised so much, I proceed to state that from 1849 to
1859 there took place a rise of about 40 percent in the average rate
of the agricultural wages of Great Britain. I could give you ample details in
proof of my assertion, but for the present purpose think it sufficient to refer
you to the conscientious and critical paper read in 1860 by the late Mr. John
C. Morton at the London Society of Arts on “The Forces used in
Agriculture.” Mr. Morton gives the returns, from bills and other
authentic documents, which he had collected from about one hundred farmers,
residing in twelve Scotch and thirty-five English counties.

According to our friend Weston's opinion, and taken together with the
simultaneous rise in the wages of the factory operatives, there ought to have
occurred a tremendous rise in the prices of agricultural produce during the
period 1849 to 1859. But what is the fact? Despite the Russian war, and the
consecutive unfavourable harvests from 1854 to 1856, the average price of
wheat, which is the leading agricultural produce of England, fell from about 3
Pounds per quarter for the years 1838 to 1848 to about 2 Pounds 10 Shillings
per quarter for the years 1849 to 1859. This constitutes a fall in the price of
wheat of more than 16 percent simultaneously with an average rise of
agricultural wages of 40 percent. During the same period, if we compare its end
with its beginning, 1859 with 1849, there was a decrease of official pauperism
from 934,419 to 860,470, the difference being 73,949; a very small decrease, I
grant, and which in the following years was again lost, but still a
decrease.

It might be said that, consequent upon the abolition of the Corn Laws, the
import of foreign corn was more than doubled during the period from 1849 to
1859, as compared with the period from 1838 to 1848. And what of that? From
Citizen Weston's standpoint one would have expected that this sudden, immense,
and continuously increasing demand upon foreign markets must have sent up the
prices of agricultural produce there to a frightful height, the effect of
increased demand remaining the same, whether it comes from without or from
within. What was the fact? Apart from some years of failing harvests, during
all that period the ruinous fall in the price of corn formed a standing theme
of declamation in France; the Americans were again and again compelled to burn
their surplus produce; and Russia, if we are to believe Mr. Urquhart, prompted
the Civil War in the United States because her agricultural exports were
crippled by the Yankee competition in the markets of Europe.

Reduced to its abstract form, Citizen Weston's argument would come
to this: Every rise in demand occurs always on the basis of a given amount of
production. It can, therefore, never increase the supply of the articles
demanded, but can only enhance their money prices. Now the most
common observation shows that an increased demand will, in some instances,
leave the market prices of commodities altogether unchanged, and will, in other
instances, cause a temporary rise of market prices followed by an increased
supply, followed by a reduction of the prices to their original level, and in
many cases below their original level. Whether the rise of demand
springs from surplus wages, or from any other cause, does not at all change the
conditions of the problem. From Citizen Weston's standpoint the general
phenomenon was as difficult to explain as the phenomenon occurring under the
exceptional circumstances of a rise of wages. His argument had, therefore, no
peculiar bearing whatever upon the subject we treat. It only expressed his
perplexity at accounting for the laws by which an increase of demand produces
an increase of supply, instead of an ultimate rise of market prices.

## III. Wages and Currency

On the second day of the debate our friend Weston clothed his
old assertions in new forms. He said: Consequent upon a general rise in money
wages, more currency will be wanted to pay the same wages. The currency being
fixed, how can you pay with this fixed currency increased money wages?
First the difficulty arose from the fixed amount of commodities accruing to the
working man despite his increase of money wages; now it arises from the
increased money wages, despite the fixed amount of commodities. Of course, if
you reject his original dogma, his secondary grievance will disappear. However,
I shall show that this currency question has nothing at all to do with the
subject before us.

In your country the mechanism of payments is much more perfected than in any
other country of Europe. Thanks to the extent and concentration of the banking
system, much less currency is wanted to circulate the same amount of values,
and to transact the same or a greater amount of business. For example, as far
as wages are concerned, the English factory operative pays his wages weekly to
the shopkeeper, who sends them weekly to the banker, who returns them weekly to
the manufacturer, who again pays them away to his working men, and so forth. By
this contrivance the yearly wages of an operative, say of 52 Pounds, may be
paid by one single Sovereign turning round every week in the same circle. Even
in England the mechanism is less perfect than in Scotland, and is not
everywhere equally perfect; and therefore we find, for example, that in some
agricultural districts, much more currency is wanted to circulate a much
smaller amount of values.

If you cross the Channel you will find that the money wages are
much lower than in England, but that they are circulated in Germany, Italy,
Switzerland, and France by a much larger amount of currency. The same
Sovereign will not be so quickly intercepted by the banker or returned to the
industrial capitalist; and, therefore, instead of one Sovereign circulating 52
Pounds yearly, you want, perhaps, three Sovereigns to circulate yearly wages to
the amount of 25 Pounds. Thus, by comparing continental countries with England,
you will see at once that low money wages may require a much larger currency
for their circulation than high money wages, and that this is, in fact, a
merely technical point, quite foreign to our subject.

According to the best calculations I know, the yearly income of the working
class of this country may be estimated at 250,000,000 Pounds. This immense sum
is circulated by about three million Pounds. Suppose a rise of wages of fifty
per cent to take place. Then, instead of three millions of currency, four and a
half millions would be wanted. As a very considerable part of the working-man's
daily expenses is laid out in silver and copper, that is to say, in mere
tokens, whose relative value to gold is arbitrarily fixed by law, like that of
inconvertible money paper, a rise of money wages by fifty per cent would, in
the extreme case, require and additional circulation of Sovereigns, say to the
amount of one million. One million, now dormant, in the shape of bullion or
coin, in the cellars of the Bank of England, or of private bankers would
circulate. But even the trifling expense resulting from the additional minting
or the additional wear and tear of that million might be spared, and would
actually be spared, if any friction should arise from the want of the
additional currency. All of you know that the currency of this country is
divided into two great departments. One sort, supplied by bank-notes of
different descriptions, is used in the transactions between dealers and
dealers, and the larger payments from consumers to dealers, while another sort
of currency, metallic coin, circulates in the retail trade. Although distinct,
these two sorts of currency intermix with each other. Thus gold coin, to a very
great extent, circulates even in larger payments for all the odd sums under 5
Pounds. If tomorrow 4 Pound notes, or 3 Pound notes, or 2 Pound notes were
issued, the gold filling these channels of circulation would at once be driven
out of them, and flow into those channels where they would be needed from the
increase of money wages. Thus the additional million required by an advance of
wages by fifty per cent would be supplied without the addition of one single
Sovereign. The same effect might be produced, without one additional bank-note,
by an additional bill circulation, as was the case in Lancashire for a very
considerable time.

If a general rise in the rate of wages, for example, of 100 per cent, as
Citizen Weston supposed it to take place in agricultural wages, would produce a
great rise in the prices of necessaries, and, according to his views, require
an additional amount of currency not to be procured, a general fall in
wages must produce the same effect, on the same scale, in the opposite
direction. Well! All of you know that the years 1858 to 1860 were the most
prosperous years for the cotton industry, and that peculiarly the year 1860
stands in that respect unrivalled in the annals of commerce, while at the same
time all other branches of industry were most flourishing. The wages of the
cotton operatives and of all the other working men connected with their trade
stood, in 1860, higher than ever before. The American crisis came, and those
aggregate wages were suddenly reduced to about one-fourth of their former
amount. This would have been in the opposite direction a rise of 400 per cent.
If wages rise from five to twenty, we say that they rise by 400 per cent; if
they fall from twenty to five, we say that they fall by seventy-five per cent;
but the amount of rise in the one and the amount of fall in the other case
would be the same, namely, fifteen shillings. This, then, was a sudden change
in the rate of wages unprecedented, and at the same time extending over a
number of operatives which, if we count all the operatives not only directly
engaged in but indirectly dependent upon the cotton trade, was larger by
one-half than the number of agricultural labourers. Did the price of wheat
fall? It rose from the annual average of 47 shillings 8d per quarter
during the three years of 1858-1860 to the annual average of 55 shillings 10d
per quarter during the three years 1861-1863. As to the currency, there were
coined in the mint in 1861 8,673,323 Pounds, against 3,378,792 Pounds in 1860.
That is to say, there were coined 5,294,440 Pounds more in 1861 than in 1860.
It is true the bank-note circulation was in 1861 less by 1,319,000 Pounds than
in 1860. Take this off. There remains still a surplus of currency for the year
1861, as compared with the prosperity year, 1860, to the amount of 3,975,440
Pounds, or about 4,000,000 Pounds; but the bullion reserve in the Bank of
England had simultaneously decreased, not quite to the same, but in an
approximating proportion.

Compare the year 1862 with 1842. Apart from the immense increase in the
value and amount of commodities circulated, in 1862 the capital paid in regular
transactions for shares, loans, etc. for the railways in England and Wales
amounted alone to 320,000,000 Pounds, a sum that would have appeared fabulous
in 1842. Still, the aggregate amounts in currency in 1862 and 1842 were pretty
nearly equal, and generally you will find a tendency to a progressive
diminution of currency in the face of enormously increasing value, not only of
commodities, but of monetary transactions generally. From our friend Weston's
standpoint this is an unsolvable riddle. Looking somewhat deeper into this
matter, he would have found that, quite apart from wages, and supposing them to
be fixed, the value and mass of the commodities to be circulated, and generally
the amount of monetary transactions to be settled, vary daily; that the amount
of bank-notes issued varies daily; that the amount of payments realized without
the intervention of any money, by the instrumentality of bills, cheques,
book-credits, clearing houses, varies daily; that, as far as actual metallic
currency is required, the proportion between the coin in circulation and the
coin and bullion in reserve or sleeping in the cellars of banks varies daily;
that the amount of bullion absorbed by the national circulation and the amount
being sent abroad for international circulation vary daily. He would have found
that this dogma of a fixed currency is a monstrous error, incompatible with our
everyday movement. He would have inquired into the laws which enable a currency
to adapt itself to circumstances so continually changing, instead of turning
his misconception of the laws of currency into an argument against a rise of
wages.

## IV. Supply and Demand

Our friend Weston accepts the Latin proverb that
“repetitio est mater studiorum,” that is to say, that
repetition is the mother of study, and consequently he repeated his original
dogma again under the new form, that the contraction of currency, resulting
from an enhancement of wages, would produce a diminution of capital, and so
forth. Having already dealt with his currency crotchet, I consider it quite
useless to enter upon the imaginary consequences he fancies to flow from his
imaginary currency mishap. I shall proceed to at once reduce his one and
the same dogma, repeated in so many different shapes, to its simplest
theoretical form.

The uncritical way in which he has treated his subject will become evident
from one single remark. He pleads against a rise of wages or against high wages
as the result of such a rise. Now, I ask him: What are high wages and what are
low wages? Why constitute, for example, five shillings weekly low, and twenty
shillings weekly high wages? If five is low as compared with twenty, twenty is
still lower as compared with two hundred. If a man was to lecture on the
thermometer, and commenced by declaiming on high and low degrees, he would
impart no knowledge whatever. He must first tell me how the freezing-point is
found out, and how the boiling-point, and how these standard points are settled
by natural laws, not by the fancy of the sellers or makers of thermometers.
Now, in regard to wages and profits, Citizen Weston has not only failed to
deduce such standard points from economical laws, but he has not even felt the
necessity to look after them. He satisfied himself with the acceptance of the
popular slang terms of low and high as something having a fixed meaning,
although it is self-evident that wages can only be said to be high or low as
compared with a standard by which to measure their magnitudes.

He will be unable to tell me why a certain amount of money is given for a
certain amount of labour. If he should answer me, “This was settled by
the law of supply and demand,” I should ask him, in the first instance,
by what law supply and demand are themselves regulated. And such an answer
would at once put him out of court. The relations between the supply and demand
of labour undergo perpetual change, and with them the market prices of labour.
If the demand overshoots the supply wages rise; if the supply overshoots the
demand wages sink, although it might in such circumstances be necessary to
test the real state of demand and supply by a strike, for example, or
any other method. But if you accept supply and demand as the law regulating
wages, it would be as childish as useless to declaim against a rise of wages,
because, according to the supreme law you appeal to, a periodical rise of wages
is quite as necessary and legitimate as a periodical fall of wages. If you do
not accept supply and demand as the law regulating wages, I again
repeat the question, why a certain amount of money is given for a certain
amount of labour?

But to consider matters more broadly: You would be altogether mistaken in
fancying that the value of labour or any other commodity whatever is ultimately
fixed by supply and demand. Supply and demand regulate nothing but the
temporary fluctuations of market prices. They will explain to you why
the market price of a commodity rises above or sinks below its value,
but they can never account for the value itself. Suppose supply and
demand to equilibrate, or, as the economists call it, to cover each other. Why,
the very moment these opposite forces become equal they paralyze each other,
and cease to work in the one or other direction. At the moment when supply and
demand equilibrate each other, and therefore cease to act, the market
price of a commodity coincides with its real value, with the
standard price round which its market prices oscillate. In inquiring into the
nature of that VALUE, we have therefore nothing at all to do with the temporary
effects on market prices of supply and demand. The same holds true of wages and
of the prices of all other commodities.

## V. Wages and Prices

Reduced to their simplest theoretical expression, all our
friend's arguments resolve themselves into this one dogma: “The
prices of commodities are determined or regulated by wages."

I might appeal to practical observation to bear witness against this
antiquated and exploded fallacy. I might tell you that the English factory
operatives, miners, shipbuilders, and so forth, whose labour is relatively
high-priced, undersell by the cheapness of their produce all other nations;
while the English agricultural labourer, for example, whose labour is
relatively low-priced, is undersold by almost every other nation because of the
dearness of his produce. By comparing article with article in the same country,
and the commodities of different countries, I might show, apart from some
exceptions more apparent than real, that on an average the high-priced labour
produces the low-priced, and low priced labour produces the high-priced
commodities. This, of course, would not prove that the high price of labour in
the one, and its low price in the other instance, are the respective causes of
those diametrically opposed effects, but at all events it would prove that the
prices of commodities are not ruled by the prices of labour. However, it is
quite superfluous for us to employ this empirical method.

It might, perhaps, be denied that Citizen Weston has put forward the dogma:
“The prices of commodities are determined or regulated by
wages.” In point of fact, he has never formulated it. He said, on
the contrary, that profit and rent also form constituent parts of the prices of
commodities, because it is out of the prices of commodities that not only the
working man's wages, but also the capitalist's profits and the landlord's rents
must be paid. But how in his idea are prices formed? First by wages. Then an
additional percentage is joined to the price on behalf of the capitalist, and
another additional percentage on behalf of the landlord. Suppose the wages of
the labour employed in the production of a commodity to be ten. If the rate of
profit was 100 per cent, to the wages advanced the capitalist would add ten,
and if the rate of rent was also 100 per cent upon the wages, there would be
added ten more, and the aggregate price of the commodity would amount to
thirty. But such a determination of prices would be simply their determination
by wages. If wages in the above case rose to twenty, the price of the commodity
would rise to sixty, and so forth. Consequently all the superannuated writers
on political economy who propounded the dogma that wages regulate prices, have
tried to prove it by treating profit and rent as mere additional
percentages upon wages. None of them were, of course, able to reduce the
limits of those percentages to any economic law. They seem, on the contrary, to
think profits settled by tradition, custom, the will of the capitalist, or by
some other equally arbitrary and inexplicable method. If they assert that they
are settled by the competition between the capitalists, they say nothing. That
competition is sure to equalize the different rates of profit in different
trades, or reduce them to one average level, but it can never determine the
level itself, or the general rate of profit.

What do we mean by saying that the prices of the commodities are determined
by wages? Wages being but a name for the price of labour, we mean that the
prices of commodities are regulated by the price of labour. As
“price” is exchangeable value — and in speaking of value I
speak always of exchangeable value — is exchangeable value expressed
in money, the proposition comes to this, that “the value of
commodities is determined by the value of labour,” or that
“the value of labour is the general measure of value."

But how, then, is the “value of labour” itself
determined? Here we come to a standstill. Of course, we come to a standstill if
we try reasoning logically, yet the propounders of that doctrine make short
work of logical scruples. Take our friend Weston, for example. First he told us
that wages regulate the price of commodities and that consequently when wages
rise prices must rise. Then he turned round to show us that a rise of wages
will be no good because the prices of commodities had risen, and because wages
were indeed measured by the prices of the commodities upon which they are
spent. Thus we begin by saying that the value of labour determines the value of
commodities, and we wind up by saying that the value of commodities determines
the value of labour. Thus we move to and fro in the most vicious circle, and
arrive at no conclusion at all.

On the whole, it is evident that by making the value of one commodity, say
labour, corn, or any other commodity, the general measure and regulator of
value, we only shift the difficulty, since we determine one value by another,
which on its side wants to be determined.

The dogma that “wages determine the price of commodities,”
expressed in its most abstract terms, comes to this, that “value is
determined by value,” and this tautology means that, in fact, we know
nothing at all about value. Accepting this premise, all reasoning about the
general laws of political economy turns into mere twaddle. It was, therefore,
the great merit of Ricardo that in his work on the principles of political
economy, published in 1817, he fundamentally destroyed the old popular,
and worn-out fallacy that “wages determine prices,” a fallacy which
Adam Smith and his French predecessors had spurned in the really scientific
parts of their researches, but which they reproduced in their more exoterical
and vulgarizing chapters.

1. The
Maximum Law was introduced during the Great French Revolution in 1792, fixing
definite price limits for commodities and standard rates of wages. The chief
supporters of the Maximum Law were the so-called “madmen” who
represented the interests of the urban and village poor. Robespierre, the
leader of the Jacobin Party, introduced this law at a time when the Jacobins as
a result of tactical considerations had formed a bloc with the
“madmen.” – Ed.

2. Robert
Owen (1771-1858) was a British manufacturer who became a utopian socialist. He
introduced in his factory the ten-hour day, and also organised sickness
insurance, consumers' co-operative societies, etc. – Ed.

3. These
figures, 55s.-70s., refer to the total wages of the group of five men. The wage
of each man in the group would increase from 11s. to 14s. – Ed.

## VI. Value and Labour

Citizens, I have now arrived at a point where I must enter upon the real development of
the question. I cannot promise to do this in a very satisfactory way, because to do so I
should be obliged to go over the whole field of political economy. I can, as the French
would say, but “effleurer la question,” touch upon the main points. The first question
we have to put is: What is the value of a commodity? How is it determined?

At first sight it would seem that the value of a commodity is a thing quite relative,
and not to be settled without considering one commodity in its relations to all other
commodities. In fact, in speaking of the value, the value in exchange of a commodity, we
mean the proportional quantities in which it exchanges with all other commodities. But
then arises the question: How are the proportions in which commodities exchange with
each other regulated? We know from experience that these proportions vary infinitely.
Taking one single commodity, wheat, for instance, we shall find that a quarter of wheat
exchanges in almost countless variations of proportion with different commodities. Yet,
its value remaining always the same, whether expressed in silk, gold, or any other
commodity, it must be something distinct from, and independent of, these different rates
of exchange with different articles. It must be possible to express, in a very different
form, these various equations with various commodities.

Besides, if I say a quarter of wheat exchanges with iron in a certain proportion, or the
value of a quarter of wheat is expressed in a certain amount of iron, I say that the
value of wheat and its equivalent in iron are equal to some third thing, which is
neither wheat nor iron, because I suppose them to express the same magnitude in two
different shapes. Either of them, the wheat or the iron, must, therefore, independently
of the other, be reducible to this third thing which is their common measure.

To elucidate this point I shall recur to a very simple geometrical illustration. In
comparing the areas of triangles of all possible forms and magnitudes, or comparing
triangles with rectangles, or any other rectilinear figure, how do we proceed? We reduce
the area of any triangle whatever to an expression quite different from its visible
form. Having found from the nature of the triangle that its area is equal to half the
product of its base by its height, we can then compare the different values of all sorts
of triangles, and of all rectilinear figures whatever, because all of them may be
resolved into a certain number of triangles.

The same mode of procedure must obtain with the values of commodities. We must be able
to reduce all of them to an expression common to all, and distinguishing them only by
the proportions in which they contain that identical measure.

As the exchangeable values of commodities are only social functions of those things, and
have nothing at all to do with the natural qualities, we must first ask: What is the
common social substance of all commodities? It is labour. To produce a commodity a
certain amount of labour must be bestowed upon it, or worked up in it. And I say not
only labour, but social labour. A man who produces an article for his own immediate use,
to consume it himself, creates a product, but not a commodity. As a self-sustaining
producer he has nothing to do with society. But to produce a commodity, a man must not
only produce an article satisfying some social want, but his labour itself must form
part and parcel of the total sum of labour expended by society. It must be subordinate
to the division of labour within society. It is nothing without the other divisions of
labour, and on its part is required to integrate them.

If we consider commodities as values, we consider them exclusively under the single
aspect of realized, fixed, or, if you like, crystallized social labour. In this respect
they can differ only by representing greater or smaller quantities of labour, as, for
example, a greater amount of labour may be worked up in a silken handkerchief than in a
brick. But how does one measure quantities of labour? By the time the labour lasts, in
measuring the labour by the hour, the day, etc. Of course, to apply this measure, all
sorts of labour are reduced to average or simple labour as their unit. We arrive,
therefore, at this conclusion. A commodity has a value, because it is a crystallization
of social labour. The greatness of its value, or its relative value, depends upon the
greater or less amount of that social substance contained in it; that is to say, on the
relative mass of labour necessary for its production. The relative values of commodities
are, therefore, determined by the respective quantities or amounts of labour, worked up,
realized, fixed in them. The correlative quantities of commodities which can be produced
in the same time of labour are equal. Or the value of one commodity is to the value of
another commodity as the quantity of labour fixed in the one is to the quantity of
labour fixed in the other.

I suspect that many of you will ask: Does then, indeed, there exist such a vast or any
difference whatever, between determining the values of commodities by wages, and
determining them by the relative quantities of labour necessary for their production?
You must, however, be aware that the reward for labour, and quantity of labour, are
quite disparate things. Suppose, for example, equal quantities of labour to be fixed in
one quarter of wheat and one ounce of gold. I resort to the example because it was used
by Benjamin Franklin in his first Essay published in 1721, and entitled A Modest Enquiry
into the Nature and Necessity of a Paper Currency, where he, one of the first, hit upon
the true nature of value.

Well. We suppose, then, that one quarter of wheat and one ounce of gold are equal values
or equivalents, because they are crystallizations of equal amounts of average labour, of
so many days' or so many weeks' labour respectively fixed in them. In thus determining
the relative values of gold and corn, do we refer in any way whatever to the wages of
the agricultural labourer and the miner? Not a bit. We leave it quite indeterminate how
their day's or their week's labour was paid, or even whether wage labour was employed at
all. If it was, wages may have been very unequal. The labourer whose labour is realized
in the quarter of wheat may receive two bushels only, and the labourer employed in
mining may receive one-half of the ounce of gold. Or, supposing their wages to be equal,
they may deviate in all possible proportions from the values of the commodities produced
by them. They may amount to one-fourth, one-fifth, or any other proportional part of the
one quarter of corn or the one ounce of gold. Their wages can, of course, not exceed,
not be more than the values of the commodities they produced, but they can be less in
every possible degree. Their wages will be limited by the values of the products, but
the values of their products will not be limited by the wages. And above all, the
values, the relative values of corn and gold, for example, will have been settled
without any regard whatever to the value of the labour employed, that is to say, to
wages. To determine the values of commodities by the relative quantities of labour fixed
in them, is, therefore, a thing quite different from the tautological method of
determining the values of commodities by the value of labour, or by wages. This point,
however, will be further elucidated in the progress of our inquiry.

In calculating the exchangeable value of a commodity we must add to the quantity of
labour previously worked up in the raw material of the commodity, and the labour
bestowed on the implements, tools, machinery, and buildings, with which such labour is
assisted. For example, the value of a certain amount of cotton yarn is the
crystallization of the quantity of labour added to the cotton during the spinning
process, the quantity of labour previously realized in the cotton itself, the quantity
of labour realized in the coal, oil, and other auxiliary substances used, the quantity
of labour fixed in the steam-engine, the spindles, the factory building, and so forth.
Instruments of production properly so-called, such as tools, machinery, buildings, serve
again and again for longer or shorter period during repeated processes of production. If
they were used up at once, like the raw material, their whole value would at once be
transferred to the commodities they assist in producing. But as a spindle, for example,
is but gradually used up, an average calculation is made, based upon the average time it
lasts, and its average waste or wear and tear during a certain period, say a day. In
this way we calculate how much of the value of the spindle is transferred to the yarn
daily spin, and how much, therefore, of the total amount of labour realized in a pound
of yarn, for example, is due to the quantity of labour previously realized in the
spindle. For our present purpose it is not necessary to dwell any longer upon this
point.

It might seem that if the value of a commodity is determined by the quantity of labour
bestowed upon its production, the lazier a man, or the clumsier a man, the more valuable
his commodity, because the greater the time of labour required for finishing the
commodity. This, however, would be a sad mistake. You will recollect that I used the
word “social labour,” and many points are involved in this qualification of “social.” In
saying that the value of a commodity is determined by the quantity of labour worked up
or crystallized in it, we mean the quantity of labour necessary for its production in a
given state of society, under certain social average conditions of production, with a
given social average intensity, and average skill of the labour employed. When, in
England, the power-loom came to compete with the hand-loom, only half the former time of
labour was wanted to convert a given amount of yarn into a yard of cotton or cloth. The
poor hand-loom weaver now worked seventeen or eighteen hours daily, instead of the nine
or ten hours he had worked before. Still the product of twenty hours of his labour
represented now only ten social hours of labour, or ten hours of labour socially
necessary for the conversion of a certain amount of yarn into textile stuffs. His
product of twenty hours had, therefore, no more value than his former product of ten
hours.

If then the quantity of socially necessary labour realized in commodities regulates
their exchangeable values, every increase in the quantity of labour wanted for the
production of a commodity must augment its value, as every diminution must lower it.

If the respective quantities of labour necessary for the production of the respective
commodities remained constant, their relative values also would be constant. But such is
not the case. The quantity of labour necessary for the production of a commodity changes
continuously with the changes in the productive powers of labour, the more produce is
finished in a given time of labour; and the smaller the productive powers of labour, the
less produce is finished in the same time. If, for example, in the progress of
population it should become necessary to cultivate less fertile soils, the same amount
of produce would be only attainable by a greater amount of labour spent, and the value
of agricultural produce would consequently rise. On the other hand, if, with the modern
means of production, a single spinner converts into yarn, during one working day, many
thousand times the amount of cotton which he could have spun during the same time with
the spinning wheel, it is evident that every single pound of cotton will absorb many
thousand times less of spinning labour than it did before, and consequently, the value
added by spinning to every single pound of cotton will be a thousand times less than
before. The value of yarn will sink accordingly.

Apart from the different natural energies and acquired working abilities of different
peoples, the productive powers of labour must principally depend: —

Firstly. Upon the natural conditions of labour, such as fertility of soil, mines, and so forth.

Secondly. Upon the progressive improvement of the social powers of labour, such as are
derived from production on a grand scale, concentration of capital and combination of
labour, subdivision of labour, machinery, improved methods, appliance of chemical and
other natural agencies, shortening of time and space by means of communication and
transport, and every other contrivance by which science presses natural agencies into
the service of labour, and by which the social or co-operative character of labour is
developed. The greater the productive powers of labour, the less labour is bestowed upon
a given amount of produce; hence the smaller the value of the produce. The smaller the
productive powers of labour, the more labour is bestowed upon the same amount of
produce; hence the greater its value. As a general law we may, therefore, set it down
that: —

The values of commodities are directly as the times of labour employed in their
production, and are inversely as the productive powers of the labour employed.

Having till now only spoken of value, I shall add a few words about price, which is a peculiar form assumed by value.

Price, taken by itself, is nothing but the monetary expression of value. The values of
all commodities of the country, for example, are expressed in gold prices, while on the
Continent they are mainly expressed in silver prices. The value of gold or silver, like
that of all other commodities is regulated by the quantity of labour necessary for
getting them. You exchange a certain amount of your national products, in which a
certain amount of your national labour is crystallized, for the produce of the gold and
silver producing countries, in which a certain quantity of their labour is crystallized.
It is in this way, in fact by barter, that you learn to express in gold and silver the
values of all commodities, that is the respective quantities of labour bestowed upon
them. Looking somewhat closer into the monetary expression of value, or what comes to
the same, the conversion of value into price, you will find that it is a process by
which you give to the values of all commodities an independent and homogeneous form, or
by which you express them as quantities of equal social labour. So far as it is but the
monetary expression of value, price has been called natural price by Adam Smith, “prix
necessaire” by the French physiocrats.

What then is the relation between value and market prices, or between natural prices and
market prices? You all know that the market price is the same for all commodities of the
same kind, however the conditions of production may differ for the individual producers.
The market price expresses only the average amount of social labour necessary, under the
average conditions of production, to supply the market with a certain mass of a certain
article. It is calculated upon the whole lot of a commodity of a certain description.

So far the market price of a commodity coincides with its value. On the other hand, the
oscillations of market prices, rising now over, sinking now under the value or natural
price, depend upon the fluctuations of supply and demand. The deviations of market
prices from values are continual, but as Adam Smith says:

“The natural price is the central price to which the prices of commodities are
continually gravitating. Different accidents may sometimes keep them suspended a good
deal above it, and sometimes force them down even somewhat below it. But whatever may be
the obstacles which hinder them from settling in this center of repose and continuance,
they are constantly tending towards it.”

I cannot now sift this matter. It suffices to say the if supply and demand equilibrate
each other, the market prices of commodities will correspond with their natural prices,
that is to say with their values, as determined by the respective quantities of labour
required for their production. But supply and demand must constantly tend to equilibrate
each other, although they do so only by compensating one fluctuation by another, a rise
by a fall, and vice versa. If instead of considering only the daily fluctuations you
analyze the movement of market prices for longer periods, as Mr. Tooke, for example, has
done in his History of Prices, you will find that the fluctuations of market prices,
their deviations from values, their ups and downs, paralyze and compensate each other;
so that apart from the effect of monopolies and some other modifications I must now pass
by, all descriptions of commodities are, on average, sold at their respective values or
natural prices. The average periods during which the fluctuations of market prices
compensate each other are different for different kinds of commodities, because with one
kind it is easier to adapt supply to demand than with the other.

If then, speaking broadly, and embracing somewhat longer periods, all descriptions of
commodities sell at their respective values, it is nonsense to suppose that profit, not
in individual cases; but that the constant and usual profits of different trades spring
from the prices of commodities, or selling them at a price over and above their value.
The absurdity of this notion becomes evident if it is generalized. What a man would
constantly win as a seller he would constantly lose as a purchaser. It would not do to
say that there are men who are buyers without being sellers, or consumers without being
producers. What these people pay to the producers, they must first get from them for
nothing. If a man first takes your money and afterwards returns that money in buying
your commodities, you will never enrich yourselves by selling your commodities too dear
to that same man. This sort of transaction might diminish a loss, but would never help
in realizing a profit. To explain, therefore, the general nature of profits, you must
start from the theorem that, on an average, commodities are sold at their real values,
and that profits are derived from selling them at their values, that is, in proportion
to the quantity of labour realized in them. If you cannot explain profit upon this
supposition, you cannot explain it at all. This seems paradox and contrary to every-day
observation. It is also paradox that the earth moves round the sun, and that water
consists of two highly inflammable gases. Scientific truth is always paradox, if judged
by every-day experience, which catches only the delusive appearance of things.

## VII. Labour Power

Having now, as far as it could be done in such a cursory manner, analyzed the nature of
value, of the value of any commodity whatever, we must turn our attention to the
specific value of labour. And here, again, I must startle you by a seeming paradox. All
of you feel sure that what they daily sell is their Labour; that, therefore, Labour has
a price, and that, the price of a commodity being only the monetary expression of its
value, there must certainly exist such a thing as the value of labour. However, there
exists no such thing as the value of labour in the common acceptance of the word. We
have seen that the amount of necessary labour crystallized in a commodity constitutes
its value. Now, applying this notion of value, how could we define, say, the value of a
ten hours working day? How much labour is contained in that day? Ten hours' labour.

To say that the value of a ten hours working day is equal to ten hours' labour, or the
quantity of labour contained in it, would be a tautological and, moreover, a nonsensical
expression. Of course, having once found out the true but hidden sense of the expression
“value of labour,” we shall be able to interpret this irrational, and seemingly
impossible application of value, in the same way that, having once made sure of the real
movement of the celestial bodies, we shall be able to explain their apparent or merely
phenomenal movements.

What the working man sells is not directly his labour, but his labouring power, the
temporary disposal of which he makes over to the capitalist. This is so much the case
that I do not know whether by the English Laws, but certainly by some Continental Laws,
the maximum time is fixed for which a man is allowed to sell his labouring power. If
allowed to do so for any indefinite period whatever, slavery would be immediately
restored. Such a sale, if it comprised his lifetime, for example, would make him at once
the lifelong slave of his employer.

One of the oldest economists and most original philosophers of England — Thomas Hobbes —
has already, in his Leviathan, instinctively hit upon this point overlooked by all his
successors. He says: “the value or worth of a man is, as in all other things, his price:
that is so much as would be given for the use of his power.” Proceeding from this basis,
we shall be able to determine the value of labour as that of all other commodities.

But before doing so, we might ask, how does this strange phenomenon arise, that we find
on the market a set of buyers, possessed of land, machinery, raw material, and the means
of subsistence, all of them, save land in its crude state, the products of labour, and
on the other hand, a set of sellers who have nothing to sell except their labouring
power, their working arms and brains? That the one set buys continually in order to make
a profit and enrich themselves, while the other set continually sells in order to earn
their livelihood? The inquiry into this question would be an inquiry into what the
economists call “previous or original accumulation,” but which ought to be called
original expropriation. We should find that this so-called original accumulation means
nothing but a series of historical processes, resulting in a decomposition of the
original union existing between the labouring Man and his Instruments of Labour. Such an
inquiry, however, lies beyond the pale of my present subject. The separation between the
Man of Labour and the Instruments of Labour once established, such a state of things
will maintain itself and reproduce itself upon a constantly increasing scale, until a
new and fundamental revolution in the mode of production should again overturn it, and
restore the original union in a new historical form.

What, then, is the value of labouring power?

Like that of every other commodity, its value is determined by the quantity of labour
necessary to produce it. The labouring power of a man exists only in his living
individuality. A certain mass of necessaries must be consumed by a man to grow up and
maintain his life. But the man, like the machine, will wear out, and must be replaced by
another man. Beside the mass of necessaries required for his own maintenance, he wants
another amount of necessaries to bring up a certain quota of children that are to
replace him on the labour market and to perpetuate the race of labourers. Moreover, to
develop his labouring power, and acquire a given skill, another amount of values must be
spent. For our purpose it suffices to consider only average labour, the costs of whose
education and development are vanishing magnitudes. Still I must seize upon this
occasion to state that, as the costs of producing labouring powers of different quality
differ, so much differ the values of the labouring powers employed in different trades.
The cry for an equality of wages rests, therefore, upon a mistake, is an inane wish
never to be fulfilled. It is an offspring of that false and superficial radicalism that
accepts premises and tries to evade conclusions. Upon the basis of the wages system the
value of labouring power is settled like that of every other commodity; and as different
kinds of labouring power have different values, or require different quantities of
labour for their production, they must fetch different prices in the labour market. To
clamour for equal or even equitable retribution on the basis of the wages system is the
same as to clamour for freedom on the basis of the slavery system. What you think just
or equitable is out of the question. The question is: What is necessary and unavoidable
with a given system of production? After what has been said, it will be seen that the
value of labouring power is determined by the value of the necessaries required to
produce, develop, maintain, and perpetuate the labouring power.

## VIII. Production of Surplus Value

Now suppose that the average amount of the daily necessaries of a labouring man require
six hours of average labour for their production. Suppose, moreover, six hours of
average labour to be also realized in a quantity of gold equal to 3s. Then 3s. would be
the price, or the monetary expression of the daily value of that man's labouring power.
If he worked daily six hours he would daily produce a value sufficient to buy the
average amount of his daily necessaries, or to maintain himself as a labouring man.

But our man is a wages labourer. He must, therefore, sell his labouring power to a
capitalist. If he sells it at 3s. daily, or 18s. weekly, he sells it at its value.
Suppose him to be a spinner. If he works six hours daily he will add to the cotton a
value of 3s. daily. This value, daily added by him, would be an exact equivalent for the
wages, or the price of his labouring power, received daily. But in that case no surplus
value or surplus produce whatever would go to the capitalist. Here, then, we come to the
rub.

In buying the labouring power of the workman, and paying its value, the capitalist, like
every other purchaser, has acquired the right to consume or use the commodity bought.
You consume or use the labouring power of a man by making him work, as you consume or
use a machine by making it run. By buying the daily or weekly value of the labouring
power of the workman, the capitalist has, therefore, acquired the right to use or make
that labouring power during the whole day or week. The working day or the working week
has, of course, certain limits, but those we shall afterwards look more closely at.

For the present I want to turn your attention to one decisive point. The value of the
labouring power is determined by the quantity of labour necessary to maintain or
reproduce it, but the use of that labouring power is only limited by the active energies
and physical strength of the labourer. The daily or weekly value of the labouring power
is quite distinct from the daily or weekly exercise of that power, the same as the food
a horse wants and the time it can carry the horseman are quite distinct. The quantity of
labour by which the value of the workman's labouring power is limited forms by no means
a limit to the quantity of labour which his labouring power is apt to perform. Take the
example of our spinner. We have seen that, to daily reproduce his labouring power, he
must daily reproduce a value of three shillings, which he will do by working six hours
daily. But this does not disable him from working ten or twelve or more hours a day. But
by paying the daily or weekly value of the spinner's labouring power the capitalist has
acquired the right of using that labouring power during the whole day or week. He will,
therefore, make him work say, daily, twelve hours. Over and above the six hours required
to replace his wages, or the value of his labouring power, he will, therefore, have to
work six other hours, which I shall call hours of surplus labour, which surplus labour
will realize itself in a surplus value and a surplus produce. If our spinner, for
example, by his daily labour of six hours, added three shillings' value to the cotton, a
value forming an exact equivalent to his wages, he will, in twelve hours, add six
shillings' worth to the cotton, and produce a proportional surplus of yarn. As he has
sold his labouring power to the capitalist, the whole value of produce created by him
belongs to the capitalist, the owner pro tem. of his labouring power. By advancing three
shillings, the capitalist will, therefore, realize a value of six shillings, because,
advancing a value in which six hours of labour are crystallized, he will receive in
return a value in which twelve hours of labour are crystallized. By repeating this same
process daily, the capitalist will daily advance three shillings and daily pocket six
shillings, one half of which will go to pay wages anew, and the other half of which will
form surplus value, for which the capitalist pays no equivalent. It is this sort of
exchange between capital and labour upon which capitalistic production, or the wages
system, is founded, and which must constantly result in reproducing the working man as a
working man, and the capitalist as a capitalist.

The rate of surplus value, all other circumstances remaining the same, will depend on
the proportion between that part of the working day necessary to reproduce the value of
the labouring power and the surplus time or surplus labour performed for the capitalist.
It will, therefore, depend on the ratio in which the working day is prolonged over and
above that extent, by working which the working man would only reproduce the value of
his labouring power, or replace his wages.

## IX. Value of Labour

We must now return to the expression, “value, or price of labour.” We have seen that, in
fact, it is only the value of the labouring power, measured by the values of commodities
necessary for its maintenance. But since the workman receives his wages after his labour
is performed, and knows, moreover, that what he actually gives to the capitalist is his
labour, the value or price of his labouring power necessarily appears to him as the
price or value of his labour itself. If the price of his labouring power is three
shillings, in which six hours of labour are realized, and if he works twelve hours, he
necessarily considers these three shillings as the value or price of twelve hours of
labour, although these twelve hours of labour realize themselves in a value of six
shillings. A double consequence flows from this.

Firstly. The value or price of the labouring power takes the semblance of the price or
value of labour itself, although, strictly speaking, value and price of labour are
senseless terms.

Secondly. Although one part only of the workman's daily labour is paid, while the other
part is unpaid, and while that unpaid or surplus labour constitutes exactly the fund out
of which surplus value or profit is formed, it seems as if the aggregate labour was paid
labour.

This false appearance distinguishes wages labour from other historical forms of labour.
On the basis of the wages system even the unpaid labour seems to be paid labour. With
the slave, on the contrary, even that part of his labour which is paid appears to be
unpaid. Of course, in order to work the slave must live, and one part of his working day
goes to replace the value of his own maintenance. But since no bargain is struck between
him and his master, and no acts of selling and buying are going on between the two
parties, all his labour seems to be given away for nothing.

Take, on the other hand, the peasant serf, such as he, I might say, until yesterday
existed in the whole of East of Europe. This peasant worked, for example, three days for
himself on his own field or the field allotted to him, and the three subsequent days he
performed compulsory and gratuitous labour on the estate of his lord. Here, then, the
paid and unpaid parts of labour were sensibly separated, separated in time and space;
and our Liberals overflowed with moral indignation at the preposterous notion of making
a man work for nothing.

In point of fact, however, whether a man works three days of the week for himself on his
own field and three days for nothing on the estate of his lord, or whether he works in
the factory or the workshop six hours daily for himself and six for his employer, comes
to the same, although in the latter case the paid and unpaid portions of labour are
inseparably mixed up with each other, and the nature of the whole transaction is
completely masked by the intervention of a contract and the pay received at the end of
the week. The gratuitous labour appears to be voluntarily given in the one instance, and
to be compulsory in the other. That makes all the difference.

In using the word “value of labour,” I shall only use it as a popular slang term for “value of labouring power."

## X. Profit is Made by Selling a Commodity at its Value

Suppose an average hour of labour to be realized in a value equal to sixpence, or twelve
average hours of labour to be realized in six shillings. Suppose, further, the value of
labour to be three shillings or the produce of six hours' labour. If, then, in the raw
material, machinery, and so forth, used up in a commodity, twenty-four hours of average
labour were realized, its value would amount to twelve shillings. If, moreover, the
workman employed by the capitalist added twelve hours of labour to those means of
production, these twelve hours would be realized in an additional value of six
shillings. The total value of the product would, therefore, amount to thirty-six hours
of realized labour, and be equal to eighteen shillings. But as the value of labour, or
the wages paid to the workman, would be three shillings only, no equivalent would have
been paid by the capitalist for the six hours of surplus labour worked by the workman,
and realized in the value of the commodity. By selling this commodity at its value for
eighteen shillings, the capitalist would, therefore, realize a value of three shillings,
for which had paid no equivalent. These three shillings would constitute the surplus
value or profit pocketed by him. The capitalist would consequently realize the profit of
three shillings, not by selling his commodity at a price over and above its value, but
by selling it at its real value.

The value of a commodity is determined by the total quantity of labour contained in it.
But part of that quantity of labour is realized in a value for which an equivalent has
been paid in the form of wages; part of it is realized in a value for which NO
equivalent has been paid. Part of the labour contained in the commodity is paid labour;
part is unpaid labour. By selling, therefore, the commodity at its value, that is, as
the crystallization of the total quantity of labour bestowed upon it, the capitalist
must necessarily sell it at a profit. He sells not only what has cost him an equivalent,
but he sells also what has cost him nothing, although it has cost his workman labour.
The cost of the commodity to the capitalist and its real cost are different things.

I repeat, therefore, that normal and average profits are made by selling commodities not above, but at their real values.

## XI. The Different Parts into which Surplus Value is Decomposed

The surplus value, or that part of the total value of the commodity in which the surplus
labour or unpaid labour of the working man is realized, I call profit. The whole of that
profit is not pocketed by the employing capitalist. The monopoly of land enables the
landlord to take one part of that surplus value, under the name of rent, whether the
land is used for agricultural buildings or railways, or for any other productive
purpose. On the other hand, the very fact that the possession of the instruments of
labour enables the employing capitalist to produce a surplus value, or, what comes to
the same, to appropriate to himself a certain amount of unpaid labour, enables the owner
of the means of labour, which he lends wholly or partly to the employing capitalist —
enables, in one word, the money-lending capitalist to claim for himself under the name
of interest another part of that surplus value, so that there remains to the employing
capitalist as such only what is called industrial or commercial profit.

By what laws this division of the total amount of surplus value amongst the three
categories of people is regulated is a question quite foreign to our subject. This much,
however, results from what has been stated.

Rent, interest, and industrial profit are only different names for different parts of
the surplus value of the commodity, or the unpaid labour enclosed in it, and they are
equally derived from this source and from this source alone. They are not derived from
land as such or from capital as such, but land and capital enable their owners to get
their respective shares out of the surplus value extracted by the employing capitalist
from the labourer. For the labourer himself it is a matter of subordinate importance
whether that surplus value, the result of his surplus labour, or unpaid labour, is
altogether pocketed by the employing capitalist, or whether the latter is obliged to pay
portions of it, under the name of rent and interest, away to third parties. Suppose the
employing capitalist to use only his own capital and to be his own landlord, then the
whole surplus value would go into his pocket.

It is the employing capitalist who immediately extracts from the labourer this surplus
value, whatever part of it he may ultimately be able to keep for himself. Upon this
relation, therefore between the employing capitalist and the wages labourer the whole
wages system and the whole present system of production hinge. Some of the citizens who
took part in our debate were, there, wrong in trying to mince matters, and to treat this
fundamental relation between the employing capitalist and the working man as a secondary
question, although they were right in stating that, under given circumstances, a rise of
prices might affect in very unequal degrees the employing capitalist, the landlord, the
moneyed capitalist, and, if you please, the tax-gatherer.

Another consequence follows from what has been stated.

That part of the value of the commodity which represents only the value of the raw
materials, the machinery, in one word, the value of the means of production used up,
forms no revenue at all, but replaces only capital. But, apart from this, it is false
that the other part of the value of the commodity which forms revenue, or may be spent
in the form of wages, profits, rent, interest, is constituted by the value of wages, the
value of rent, the value of profits, and so forth. We shall, in the first instance,
discard wages, and only treat industrial profits, interest, and rent. We have just seen
that the surplus value contained in the commodity, or that part of its value in which
unpaid labour is realized, resolves itself into different fractions, bearing three
different names.

But it would be quite the reverse of the truth to say that its value is composed of, or
formed by, the addition of the independent values of these three constituents.

If one hour of labour realizes itself in a value of sixpence, if the working day of the
labourer comprises twelve hours, if half of this time is unpaid labour, that surplus
labour will add to the commodity a surplus value of three shillings, that is of value
for which no equivalent has been paid. This surplus value of three shillings constitutes
the whole fund which the employing capitalist may divide, in whatever proportions, with
the landlord and the money-lender. The value of these three shillings constitutes the
limit of the value they have to divide amongst them. But it is not the employing
capitalist who adds to the value of the commodity an arbitrary value for his profit, to
which another value is added for the landlord, and so forth, so that the addition of
these arbitrarily fixed values would constitute the total value. You see, therefore, the
fallacy of the popular notion, which confounds the decomposition of a given value into
three parts, with the formation of that value by the addition of three independent
values, thus converting the aggregate value, from which rent, profit, and interest are
derived, into an arbitrary magnitude.

If the total profit realized by a capitalist is equal to 100 Pounds, we call this sum,
considered as absolute magnitude, the amount of profit. But if we calculate the ratio
which those 100 Pounds bear to the capital advanced, we call this relative magnitude,
the rate of profit. It is evident that this rate of profit may be expressed in a double
way.

Suppose 100 Pounds to be the capital advanced in wages. If the surplus value created is
also 100 Pounds — and this would show us that half the working day of the labourer
consists of unpaid labour — and if we measured this profit by the value of the capital
advanced in wages, we should say that the rate of profit amounted to one hundred
percent, because the value advanced would be one hundred and the value realized would be
two hundred.

If, on the other hand, we should not only consider the capital advanced in wages, but
the total capital advanced, say, for example, 500 Pounds, of which 400 Pounds
represented the value of raw materials, machinery, and so forth, we should say that the
rate of profit amounted only to twenty percent, because the profit of one hundred would
be but the fifth part of the total capital advanced.

The first mode of expressing the rate of profit is the only one which shows you the real
ratio between paid and unpaid labour, the real degree of the exploitation (you must
allow me this French word) of labour. The other mode of expression is that in common
use, and is, indeed, appropriate for certain purposes. At all events, it is very useful
for concealing the degree in which the capitalist extracts gratuitous labour from the
workman.

In the remarks I have still to make I shall use the word profit for the whole amount of
the surplus value extracted by the capitalist without any regard to the division of that
surplus value between different parties, and in using the words rate of profit, I shall
always measure profits by the value of the capital advanced in wages.

## XII. General Relation of Profits, Wages, and Prices

Deduct from the value of a commodity the value replacing the value of the raw materials
and other means of production used upon it, that is to say, deduct the value
representing the past labour contained in it, and the remainder of its value will
resolve into the quantity of labour added by the working man last employed. If that
working man works twelve hours daily, if twelve hours of average labour crystallize
themselves in an amount of gold equal to six shillings, this additional value of six
shillings is the only value his labour will have created. This given value, determined
by the time of his labour, is the only fund from which both he and the capitalist have
to draw their respective shares or dividends, the only value to be divided into wages
and profits. It is evident that this value itself will not be altered by the variable
proportions in which it may be divided amongst the two parties. There will also be
nothing changed if in the place of one working man you put the whole working population,
twelve million working days, for example, instead of one.

Since the capitalist and workman have only to divide this limited value, that is, the
value measured by the total labour of the working man, the more the one gets the less
will the other get, and vice versa. Whenever a quantity is given, one part of it will
increase inversely as the other decreases. If the wages change, profits will change in
an opposite direction. If wages fall, profits will rise; and if wages rise, profits will
fall. If the working man, on our former supposition, gets three shillings, equal to one
half of the value he has created, or if his whole working day consists half of paid,
half of unpaid labour, the rate of profit will be 100 percent, because the capitalist
would also get three shillings. If the working man receives only two shillings, or works
only one third of the whole day for himself, the capitalist will get four shillings, and
the rate of profit will be 200 per cent. If the working man receives four shillings, the
capitalist will only receive two, and the rate of profit would sink to 50 percent, but
all these variations will not affect the value of the commodity. A general rise of wages
would, therefore, result in a fall of the general rate of profit, but not affect values.

But although the values of commodities, which must ultimately regulate their market
prices, are exclusively determined by the total quantities of labour fixed in them, and
not by the division of that quantity into paid and unpaid labour, it by no means follows
that the values of the single commodities, or lots of commodities, produced during
twelve hours, for example, will remain constant. The number or mass of commodities
produced in a given time of labour, or by a given quantity of labour, depends upon the
productive power of the labour employed, and not upon its extent or length. With one
degree of the productive power of spinning labour, for example, a working day of twelve
hours may produce twelve pounds of yarn, with a lesser degree of productive power only
two pounds. If then twelve hours' average labour were realized in the value of six
shillings in the one case, the twelve pounds of yarn would cost six shillings, in the
other case the two pounds of yarn would also cost six shillings. One pound of yarn
would, therefore, cost sixpence in the one case, and three shillings in the other. The
difference of price would result from the difference in the productive powers of labour
employed. One hour of labour would be realized in one pound of yarn with the greater
productive power, while with the smaller productive power, six hours of labour would be
realized in one pound of yarn. The price of a pound of yarn would, in the one instance,
be only sixpence, although wages were relatively high and the rate of profit low; it
would be three shillings in the other instance, although wages were low and the rate of
profit high. This would be so because the price of the pound of yarn is regulated by the
total amount of labour worked up in it, and not by the proportional division of that
total amount into paid and unpaid labour. The fact I have mentioned before that high-
price labour may produce cheap, and low-priced labour may produce dear commodities,
loses, therefore, its paradoxical appearance. It is only the expression of the general
law that the value of a commodity is regulated by the quantity of labour worked up in
it, and the quantity of labour worked up in it depends altogether upon the productive
powers of labour employed, and will therefore, vary with every variation in the
productivity of labour.

## XIII. Main Cases of Attempts at Raising Wages or Resisting their Fall

Let us now seriously consider the main cases in which a rise of wages is attempted or a reduction of wages resisted.

1. We have seen that the value of the labouring power, or in more popular parlance, the
value of labour, is determined by the value of necessaries, or the quantity of labour
required to produce them.

If, then, in a given country the value of the daily average necessaries of the labourer
represented six hours of labour expressed in three shillings, the labourer would have to
work six hours daily to produce an equivalent for this daily maintenance. If the whole
working day was twelve hours, the capitalist would pay him the value of his labour by
paying him three shillings. Half the working day would be unpaid labour, and the rate of
profit would amount to 100 percent. But now suppose that, consequent upon a decrease of
productivity, more labour should be wanted to produce, say, the same amount of
agricultural produce, so that the price of the average daily necessaries should rise
from three to four shillings. In that case the value of labour would rise by one third,
or 33 1/3 percent. Eight hours of the working day would be required to produce an
equivalent for the daily maintenance of the labourer, according to his old standard of
living. The surplus labour would therefore sink from six hours to four, and the rate of
profit from 100 to 50 percent. But in insisting upon a rise of wages, the labourer would
only insist upon getting the increased value of his labour, like every other seller of a
commodity, who, the costs of his commodities having increased, tries to get its
increased value paid. If wages did not rise, or not sufficiently rise, to compensate for
the increased values of necessaries, the price of labour would sink below the value of
labour, and the labourer's standard of life would deteriorate.

But a change might also take place in an opposite direction. By virtue of the increased
productivity of labour, the same amount of the average daily necessaries might sink from
three to two shillings, or only four hours out of the working day, instead of six, be
wanted to reproduce an equivalent for the value of the daily necessaries. The working
man would now be able to buy with two shillings as many necessaries as he did before
with three shillings. Indeed, the value of labour would have sunk, but diminished value
would command the same amount of commodities as before. Then profits would rise from
three to four shillings, and the rate of profit from 100 to 200 percent. Although the
labourer's absolute standard of life would have remained the same, his relative wages,
and therewith his relative social position, as compared with that of the capitalist,
would have been lowered. If the working man should resist that reduction of relative
wages, he would only try to get some share in the increased productive powers of his own
labour, and to maintain his former relative position in the social scale. Thus, after
the abolition of the Corn Laws, and in flagrant violation of the most solemn pledges
given during the anti-corn law agitation, the English factory lords generally reduced
wages ten per cent. The resistance of the workmen was at first baffled, but, consequent
upon circumstances I cannot now enter upon, the ten per cent lost were afterwards
regained.

2. The values of necessaries, and consequently the value of labour, might remain the
same, but a change might occur in their money prices, consequent upon a previous change
in the value of money. By the discovery of more fertile mines and so forth, two ounces
of gold might, for example, cost no more labour to produce than one ounce did before.
The value of gold would then be depreciated by one half, or fifty per cent. As the
values of all other commodities would then be expressed in twice their former money
prices, so also the same with the value of labour. Twelve hours of labour, formerly
expressed in six shillings, would now be expressed in twelve shillings. If the working
man's wages should remain three shillings, instead of rising to six shillings, the money
price of his labour would only be equal to half the value of his labour, and his
standard of life would fearfully deteriorate. This would also happen in a greater or
lesser degree if his wages should rise, but not proportionately to the fall in the value
of gold. In such a case nothing would have been changed, either in the productive powers
of labour, or in supply and demand, or in values.

Nothing would have changed except the money names of those values. To say that in such a
case the workman ought not to insist upon a proportionate rise of wages, is to say that
he must be content to be paid with names, instead of with things. All past history
proves that whenever such a depreciation of money occurs, the capitalists are on the
alert to seize this opportunity for defrauding the workman. A very large school of
political economists assert that, consequent upon the new discoveries of gold lands, the
better working of silver mines, and the cheaper supply of quicksilver, the value of
precious metals has again depreciated. This would explain the general and simultaneous
attempts on the Continent at a rise of wages.

3. We have till now supposed that the working day has given limits. The working day,
however, has, by itself, no constant limits. It is the constant tendency of capital to
stretch it to its utmost physically possible length, because in the same degree surplus
labour, and consequently the profit resulting therefrom, will be increased. The more
capital succeeds in prolonging the working day, the greater the amount of other peoples'
labour it will appropriate.

During the seventeenth and even the first two thirds of the eighteenth century a ten
hours' working day was the normal working day all over England. During the anti-Jacobin
war, which was in fact a war waged by the British barons against the British working
masses, capital celebrated its bacchanalia, and prolonged the working day from ten to
twelve, fourteen, eighteen hours. Malthus, by no means a man whom you would suspect of a
maudlin sentimentalism declared in a pamphlet, published about 1815, that if this sort
of thing was to go on the life of the nation would be attacked at its very source. A few
years before the general introduction of newly-invented machinery, about 1765, a
pamphlet appeared in England under the title, An Essay On Trade. The anonymous author,
an avowed enemy of the working classes, declaims on the necessity of expanding the
limits of the working day. Amongst other means to this end, he proposes working houses,
which, he says, ought to be “Houses of Terror.” And what is the length of the working he
prescribes for these “Houses of Terror"? Twelve hours, the very same time which in 1832
was declared by capitalists, political economists, and ministers to be not only the
existing but the necessary time of labour for a child under twelve years.

By selling his labouring power, and he must do so under the present system, the working
man makes over to the capitalist the consumption of that power, but within certain
rational limits. He sells his labouring power in order to maintain it, apart from its
natural wear and tear, but not to destroy it. In selling his labouring power at its
daily or weekly value, it is understood that in one day or one week that labouring power
shall not be submitted to two days' or two weeks' waste or wear and tear. Take a machine
worth 1000 Pounds. If it is used up in ten years it will add to the value of the
commodities in whose production it assists 100 Pounds yearly. If it is used up in five
years it will add 200 Pounds yearly, or the value of its annual wear and tear is in
inverse ratio to the quickness with which it is consumed. But this distinguishes the
working man from the machine. Machinery does not wear out exactly in the same ratio in
which it is used. Man, on the contrary, decays in a greater ratio than would be visible
from the mere numerical addition of work.

In their attempts at reducing the working day to its former rational dimensions, or,
where they cannot enforce a legal fixation of a normal working day, at checking overwork
by a rise of wages, a rise not only in proportion to the surplus time exacted, but in a
greater proportion, working men fulfill only a duty to themselves and their race. They
only set limits to the tyrannical usurpations of capital. Time is the room of human
development. A man who has no free time to dispose of, whose whole lifetime, apart from
the mere physical interruptions by sleep, meals, and so forth, is absorbed by his labour
for the capitalist, is less than a beast of burden. He is a mere machine for producing
Foreign Wealth, broken in body and brutalized in mind. Yet the whole history of modern
industry shows that capital, if not checked, will recklessly and ruthlessly work to cast
down the whole working class to this utmost state of degradation.

In prolonging the working day the capitalist may pay higher wages and still lower the
value of labor, if the rise of wages does not correspond to the greater amount of labour
extracted, and the quicker decay of the labouring power thus caused. This may be done in
another way. Your middle-class statisticians will tell you, for instance, that the
average wages of factory families in Lancashire has risen. They forget that instead of
the labour of the man, the head of the family, his wife and perhaps three or four
children are now thrown under the Juggernaut wheels of capital, and that the rise of the
aggregate wages does not correspond to the aggregate surplus labour extracted from the
family.

Even with given limits of the working day, such as they now exist in all branches of
industry subjected to the factory laws, a rise of wages may become necessary, if only to
keep up the old standard value of labour. By increasing the intensity of labour, a man
may be made to expend as much vital force in one hour as he formerly did in two. This
has, to a certain degree, been effected in the trades, placed under the Factory Acts, by
the acceleration of machinery, and the greater number of working machines which a single
individual has now to superintend. If the increase in the intensity of labour or the
mass of labour spent in an hour keeps some fair proportion to the decrease in the extent
of the working day, the working man will still be the winner. If this limit is overshot,
he loses in one form what he has gained in another, and ten hours of labour may then
become as ruinous as twelve hours were before. In checking this tendency of capital, by
struggling for a rise of wages corresponding to the rising intensity of labour, the
working man only resists the depreciation of his labour and the deterioration of his
race.

4. All of you know that, from reasons I have not now to explain, capitalistic production
moves through certain periodical cycles. It moves through a state of quiescence, growing
animation, prosperity, overtrade, crisis, and stagnation. The market prices of
commodities, and the market rates of profit, follow these phases, now sinking below
their averages, now rising above them.

Considering the whole cycle, you will find that one deviation of the market price is
being compensated by the other, and that, taking the average of the cycle, the market
prices of commodities are regulated by their values. Well! During the phases of sinking
market prices and the phases of crisis and stagnation, the working man, if not thrown
out of employment altogether, is sure to have his wages lowered. Not to be defrauded, he
must, even with such a fall of market prices, debate with the capitalist in what
proportional degree a fall of wages has become necessary. If, during the phases of
prosperity, when extra profits are made, he did not battle for a rise of wages, he
would, taking the average of one industrial cycle, not even receive his average wages,
or the value of his labour. It is the utmost height of folly to demand, that while his
wages are necessarily affected by the adverse phases of the cycle, he should exclude
himself from compensation during the prosperous phases of the cycle. Generally, the
values of all commodities are only realized by the compensation of the continuously
changing market prices, springing from the continuous fluctuations of demand and supply.
On the basis of the present system labour is only a commodity like others. It must,
therefore, pass through the same fluctuations to fetch an average price corresponding to
its value.

It would be absurd to treat it on the one hand as a commodity, and to want on the other
hand to exempt it from the laws which regulate the prices of commodities. The slave
receives a permanent and fixed amount of maintenance; the wage-labourer does not. He
must try to get a rise of wages in the one instance, if only to compensate for a fall of
wages in the other. If he resigned himself to accept the will, the dictates of the
capitalist as a permanent economical law, he would share in all the miseries of the
slave, without the security of the slave.

5. In all the cases I have considered, and they form ninety-nine out of a hundred, you
have seen that a struggle for a rise of wages follows only in the track of previous
changes, and is the necessary offspring of previous changes in the amount of production,
the productive powers of labour, the value of labour, the value of money, the extent or
the intensity of labour extracted, the fluctuations of market prices, dependent upon the
fluctuations of demand and supply, and consistent with the different phases of the
industrial cycle; in one word, as reactions of labour against the previous action of
capital. By treating the struggle for a rise of wages independently of all these
circumstances, by looking only upon the change of wages, and overlooking all other
changes from which they emanate, you proceed from a false premise in order to arrive at
false conclusions.

## XIV. The Struggle Between Capital and Labour and its Results

1. Having shown that the periodical resistance on the part of the working men against a
reduction of wages, and their periodical attempts at getting a rise of wages, are
inseparable from the wages system, and dictated by the very fact of labour being
assimilated to commodities, and therefore subject to the laws, regulating the general
movement of prices; having furthermore, shown that a general rise of wages would result
in a fall in the general rate of profit, but not affect the average prices of
commodities, or their values, the question now ultimately arises, how far, in this
incessant struggle between capital and labour, the latter is likely to prove successful.

I might answer by a generalization, and say that, as with all other commodities, so with
labour, its market price will, in the long run, adapt itself to its value; that,
therefore, despite all the ups and downs, and do what he may, the working man will, on
an average, only receive the value of his labour, which resolves into the value of his
labouring power, which is determined by the value of the necessaries required for its
maintenance and reproduction, which value of necessaries finally is regulated by the
quantity of labour wanted to produce them.

But there are some peculiar features which distinguish the value of the labouring power,
or the value of labour, from the values of all other commodities. The value of the
labouring power is formed by two elements -- the one merely physical, the other
historical or social. Its ultimate limit is determined by the physical element, that is
to say, to maintain and reproduce itself, to perpetuate its physical existence, the
working class must receive the necessaries absolutely indispensable for living and
multiplying. The value of those indispensable necessaries forms, therefore, the ultimate
limit of the value of labour. On the other hand, the length of the working day is also
limited by ultimate, although very elastic boundaries. Its ultimate limit is given by
the physical force of the labouring man. If the daily exhaustion of his vital forces
exceeds a certain degree, it cannot be exerted anew, day by day.

However, as I said, this limit is very elastic. A quick succession of unhealthy and
short-lived generations will keep the labour market as well supplied as a series of
vigorous and long-lived generations. Besides this mere physical element, the value of
labour is in every country determined by a traditional standard of life. It is not mere
physical life, but it is the satisfaction of certain wants springing from the social
conditions in which people are placed and reared up. The English standard of life may be
reduced to the Irish standard; the standard of life of a German peasant to that of a
Livonian peasant. The important part which historical tradition and social habitude play
in this respect, you may learn from Mr. Thornton's work on over-population, where he
shows that the average wages in different agricultural districts of England still
nowadays differ more or less according to the more or less favourable circumstances
under which the districts have emerged from the state of serfdom.

This historical or social element, entering into the value of labour, may be expanded,
or contracted, or altogether extinguished, so that nothing remains but the physical
limit. During the time of the anti-Jacobin war, undertaken, as the incorrigible tax-
eater and sinecurist, old George Rose, used to say, to save the comforts of our holy
religion from the inroads of the French infidels, the honest English farmers, so
tenderly handled in a former chapter of ours, depressed the wages of the agricultural
labourers even beneath that mere physical minimum, but made up by Poor Laws the
remainder necessary for the physical perpetuation of the race. This was a glorious way
to convert the wages labourer into a slave, and Shakespeare's proud yeoman into a
pauper.

By comparing the standard wages or values of labour in different countries, and by
comparing them in different historical epochs of the same country, you will find that
the value of labour itself is not a fixed but a variable magnitude, even supposing the
values of all other commodities to remain constant.

A similar comparison would prove that not only the market rates of profit change, but its average rates.

But as to profits, there exists no law which determines their minimum. We cannot say
what is the ultimate limit of their decrease. And why cannot we fix that limit? Because,
although we can fix the minimum of wages, we cannot fix their maximum.

We can only say that, the limits of the working day being given, the maximum of profit
corresponds to the physical minimum of wages; and that wages being given, the maximum of
profit corresponds to such a prolongation of the working day as is compatible with the
physical forces of the labourer. The maximum of profit is therefore limited by the
physical minimum of wages and the physical maximum of the working day. It is evident
that between the two limits of the maximum rate of profit an immense scale of variations
is possible. The fixation of its actual degree is only settled by the continuous
struggle between capital and labour, the capitalist constantly tending to reduce wages
to their physical minimum, and to extend the working day to its physical maximum, while
the working man constantly presses in the opposite direction.

The matter resolves itself into a question of the respective powers of the combatants.

2. As to the limitation of the working day in England, as in all other countries, it has
never been settled except by legislative interference. Without the working men's
continuous pressure from without that interference would never have taken place. But at
all events, the result was not to be attained by private settlement between the working
men and the capitalists. This very necessity of general political action affords the
proof that in its merely economical action capital is the stronger side.

As to the limits of the value of labour, its actual settlement always depends upon
supply and demand, I mean the demand for labour on the part of capital, and the supply
of labour by the working men. In colonial countries the law of supply and demand favours
the working man. Hence the relatively high standard of wages in the United States.
Capital may there try its utmost. It cannot prevent the labour market from being
continuously emptied by the continuous conversion of wages labourers into independent,
self-sustaining peasants. The position of a wages labourer is for a very large part of
the American people but a probational state, which they are sure to leave within a
longer or shorter term. To mend this colonial state of things the paternal British
Government accepted for some time what is called the modern colonization theory, which
consists in putting an artificial high price upon colonial land, in order to prevent the
too quick conversion of the wages labourer into the independent peasant.

But let us now come to old civilized countries, in which capital domineers over the
whole process of production. Take, for example, the rise in England of agricultural
wages from 1849 to 1859. What was its consequence? The farmers could not, as our friend
Weston would have advised them, raise the value of wheat, nor even its market prices.
They had, on the contrary, to submit to their fall. But during these eleven years they
introduced machinery of all sorts, adopted more scientific methods, converted part of
arable land into pasture, increased the size of farms, and with this the scale of
production, and by these and other processes diminishing the demand for labour by
increasing its productive power, made the agricultural population again relatively
redundant. This is the general method in which a reaction, quicker or slower, of capital
against a rise of wages takes place in old, settled countries. Ricardo has justly
remarked that machinery is in constant competition with labour, and can often be only
introduced when the price of labour has reached a certain height, but the appliance of
machinery is but one of the many methods for increasing the productive powers of labour.
The very same development which makes common labour relatively redundant simplifies, on
the other hand, skilled labour, and thus depreciates it.

The same law obtains in another form. With the development of the productive powers of
labour the accumulation of capital will be accelerated, even despite a relatively high
rate of wages. Hence, one might infer, as Adam Smith, in whose days modern industry was
still in its infancy, did infer, that the accelerated accumulation of capital must turn
the balance in favour of the working man, by securing a growing demand for his labour.
From this same standpoint many contemporary writers have wondered that English capital
having grown in that last twenty years so much quicker than English population, wages
should not have been more enhanced. But simultaneously with the progress of accumulation
there takes place a progressive change in the composition of capital. That part of the
aggregate capital which consists of fixed capital, machinery, raw materials, means of
production in all possible forms, progressively increases as compared with the other
part of capital, which is laid out in wages or in the purchase of labour. This law has
been stated in a more or less accurate manner by Mr. Barton, Ricardo, Sismondi,
Professor Richard Jones, Professor Ramsey, Cherbuilliez, and others.

If the proportion of these two elements of capital was originally one to one, it will,
in the progress of industry, become five to one, and so forth. If of a total capital of
600, 300 is laid out in instruments, raw materials, and so forth, and 300 in wages, the
total capital wants only to be doubled to create a demand for 600 working men instead of
for 300. But if of a capital of 600, 500 is laid out in machinery, materials, and so
forth and 100 only in wages, the same capital must increase from 600 to 3,600 in order
to create a demand for 600 workmen instead of 300. In the progress of industry the
demand for labour keeps, therefore, no pace with the accumulation of capital. It will
still increase, but increase in a constantly diminishing ratio as compared with the
increase of capital.

These few hints will suffice to show that the very development of modern industry must
progressively turn the scale in favour of the capitalist against the working man, and
that consequently the general tendency of capitalistic production is not to raise, but
to sink the average standard of wages, or to push the value of labour more or less to
its minimum limit. Such being the tendency of things in this system, is this saying that
the working class ought to renounce their resistance against the encroachments of
capital, and abandon their attempts at making the best of the occasional chances for
their temporary improvement? If they did, they would be degraded to one level mass of
broken wretches past salvation. I think I have shown that their struggles for the
standard of wages are incidents inseparable from the whole wages system, that in 99
cases out of 100 their efforts at raising wages are only efforts at maintaining the
given value of labour, and that the necessity of debating their price with the
capitalist is inherent to their condition of having to sell themselves as commodities.
By cowardly giving way in their everyday conflict with capital, they would certainly
disqualify themselves for the initiating of any larger movement.

At the same time, and quite apart from the general servitude involved in the wages
system, the working class ought not to exaggerate to themselves the ultimate working of
these everyday struggles. They ought not to forget that they are fighting with effects,
but not with the causes of those effects; that they are retarding the downward movement,
but not changing its direction; that they are applying palliatives, not curing the
malady. They ought, therefore, not to be exclusively absorbed in these unavoidable
guerilla fights incessantly springing up from the never ceasing encroachments of capital
or changes of the market. They ought to understand that, with all the miseries it
imposes upon them, the present system simultaneously engenders the material conditions
and the social forms necessary for an economical reconstruction of society. Instead of
the conservative motto: “A fair day's wage for a fair day's work!” they ought to
inscribe on their banner the revolutionary watchword: “Abolition of the wages system!"

After this very long and, I fear, tedious exposition, which I was obliged to enter into
to do some justice to the subject matter, I shall conclude by proposing the following
resolutions:

Firstly. A general rise in the rate of wages would result in a fall of the general rate
of profit, but, broadly speaking, not affect the prices of commodities.

Secondly. The general tendency of capitalist production is not to raise, but to sink the average standard of wages.

Thirdly. Trades Unions work well as centers of resistance against the encroachments of
capital. They fail partially from an injudicious use of their power. They fail generally
from limiting themselves to a guerilla war against the effects of the existing system,
instead of simultaneously trying to change it, instead of using their organized forces
as a lever for the final emancipation of the working class that is to say the ultimate
abolition of the wages system.