1st correction.

Friedrich Engels

[Review
of the First Volume “Capital”
for the “Fortnightly Review”]

Karl Marx on Capital

(1)

In his investigations into the means of circulation, Mr Thomas Tooke points out the fact that money in its function as capital returns to its starting point, whereas this is not the case with money that performs the function of mere means of circulation. This distinction (which, however, was drawn long before by Sir James Steuart) serves Mr Tooke merely as one link in his argument against the “Currency men” and their assertions about the influence of the issue of paper money on commodity prices. Our author, by contrast, makes this distinction the starting point of his investigation into the nature of capital itself, and especially the question: How is money, this independent form of value, transformed into capital?

All sorts of businessmen, says Turgot, have this in common, that they buy in order to sell; their purchases are an advance which later flows back to them.

Buying in order to sell – this is indeed the transaction in which money functions as capital and which conditions its return to its starting point, in contrast to selling in order to buy, in which money need function only as means of circulation. Thus it becomes evident that the different sequence in which the acts of sale and purchase follow one another impresses two different movements of circulation upon money. To illustrate these two processes, our author gives the following formula:

Selling in order to buy: a commodity C is exchanged for money M, which is again exchanged for another commodity C; or C – M – C.

Buying in order to sell: money is exchanged for a commodity and this again for money: M – C – M.

The formula C – M – C represents simple commodity circulation, in which money functions as a means of circulation, as money. This formula is analysed in the first chapter of this book, which contains a new and very simple theory of value and money, one that is scientifically extremely interesting, but which we will leave out of consideration here, since on the whole it is incidental to what we regard as the essential in Mr Marx’s views on capital.

The formula M – C – M, on the other hand, represents that form of circulation in which money is transformed into capital.

The process of buying for selling, M – C – M, can obviously be resolved into M – M; it is an indirect exchange of money for money. Suppose I buy cotton for £1,000 and sell it for £1,100, then I have in the end exchanged £1,000 for £1,100, money for money.

If this process always had as its consequence the return of the same sum of money that I advanced, it would be absurd. But whether the merchant who has advanced £1,000 realises £1,100, £1,000, or even only £900, his money has nonetheless described a movement quite different from that of the formula C – M – C; a formula which means selling in order to buy, selling something one does not need in order to be able to buy what one does need. Let us compare the two formulas.

Each process consists of two phases or acts, and these two acts are the same in both formulas; yet between the two processes themselves there is a great difference. In C – M – C, money forms only the intermediary; the commodity, the use-value, forms the starting point and the end point. In M – C – M, the commodity forms the intermediate link, while money forms the beginning and the end. In C – M – C, the money is definitively spent; in M – C – M, it is only advanced, it is meant to be recovered. It flows back to its starting point, and here we have the first palpable difference between the circulation of money as money and that of money as capital.

In the process of selling for buying, C – M – C, the money can flow back to its starting point only through the repetition of the whole process, through the sale of fresh commodities. The reflux is therefore independent of the process itself. In M – C – M, by contrast, this reflux is a necessity and intended from the outset; if it does not take place, there is an interruption somewhere, and the process remains incomplete.

Selling for buying has the acquisition of use-value as its aim; buying for selling has the acquisition of exchange-value.

In the formula C – M – C, the two extremes are, economically expressed, identical. They are both commodities; they are, moreover, of the same magnitude of value, for the whole theory of value presupposes that normally only equivalents are exchanged. At the same time, these two extremes C – C are qualitatively different use-values, and it is precisely for that reason that they are exchanged. In the process M – C – M, the whole operation seems, at first sight, pointless. To exchange £100 for £100, and by a roundabout route at that, seems absurd. One sum of money can differ from another sum of money only by its magnitude. M – C – M can therefore acquire a meaning only through the quantitative difference of its extremes. More money must be withdrawn from circulation than was thrown into it. The cotton bought for £1,000 is sold at £1,100 = £1,000 + £100; the formula representing this process therefore transforms itself into M – C – M', where M' = M + ΔM, M plus an increment. This ΔM, this increment, Mr Marx calls surplus-value(2). The value originally advanced not only preserves itself, but adds an increment to itself, it valorises itself, and this process transforms money into capital.

In the circulation formula C – M – C, a difference in value between the extremes may of course also exist, but such a circumstance is here quite inessential; the formula does not become absurd if both extremes are equivalents. On the contrary, this is a condition of its normal character.

The repetition of C – M – C is restricted by circumstances lying wholly outside the exchange process: by the needs of consumption. In M – C – M, on the contrary, the beginning and the end are, qualitatively considered, the same, and it is precisely thereby that the movement is, or can be, endless. M + ΔM is undoubtedly a different quantity from M; but yet it is also only a limited sum of money. If it were spent, it would cease to be capital; if it were withdrawn from circulation, it would remain stationary as a hoard. Once the need for the valorisation of value is given, this need exists just as much for M' as for M; the movement of capital becomes a constant and endless one, because its goal is as much unattained at the end of each individual process as it was before. The carrying out of this endless process transforms the possessor of money into a capitalist.

The formula M – C – M seems to be applicable only to merchant’s capital. But industrial capital, too, is money that is exchanged for commodities and exchanged again for more money. In this case, a number of operations do admittedly occur between purchase and sale, operations that lie outside the pure sphere of circulation; yet they change nothing in the essence of the process. On the other hand, the same process presents itself in its most abbreviated form in interest-bearing capital. Here the formula shrinks to M – M', value that is, as it were, greater than itself.

But where does this increment of M, this surplus-value, come from? Our preceding investigations into the nature of commodities, of value, of money and of circulation itself not only leave this question unanswered, but even seem to exclude every form of circulation that results in anything like a surplus-value. The whole difference between commodity circulation (C – M – C) and the circulation of money as capital (M – C – M) seems to consist in a simple inversion of the process. How should this inversion be able to bring about such a strange result?

And there is more: This inversion exists only for one of the three parties involved in the process. As a capitalist, I buy a commodity from A and sell it again to B. A and B appear only as simple sellers and buyers of commodities. I myself, in buying from A, appear only as a possessor of money, and in selling to B only as a possessor of commodities; yet in neither of these transactions do I appear as a capitalist, as the representative of something that is more than money or commodity. For A, the transaction began with a sale; for B, with a purchase. If from my standpoint an inversion of the formula C – M – C takes place, this is not the case from their standpoint. Moreover, nothing can prevent A from selling his commodity to B without my mediation, and then there would be no prospect of any surplus-value.

Suppose A and B buy what they need directly from each other. As far as use-value is concerned, both may gain. A may even produce more of his particular commodity than B could produce in the same time, and vice versa, whereby both would gain. But with exchange-value the case is different. Here equal magnitudes of value are exchanged, whether money serves as the intermediary or not.

Considered abstractly, that is to say, disregarding all circumstances that are not derivable from the immanent laws of simple commodity circulation, nothing takes place in this simple circulation besides the replacement of one use-value by another, apart from a change in the form of the commodity. The same exchange-value, the same quantum of objectified social labour, remains in the hand of the commodity possessor, whether in the shape of this commodity itself, or of the money for which it is sold, or in the shape of the second commodity bought with the money. This change of form no more involves an alteration in the magnitude of value than exchanging a five-pound note for five sovereigns. Insofar as it is merely a change in the form of exchange-value, equivalents must be exchanged, at least when the process proceeds in its pure shape and under normal conditions. Commodities can be sold at prices above or below their values, but only if the law of commodity exchange is violated. In its pure and normal shape, commodity exchange is therefore no means of creating surplus-value. Hence the error of all economists who try to derive surplus-value from commodity exchange, such as Condillac.

But let us suppose that the process does not proceed under normal conditions and that non-equivalents are exchanged. Let us suppose, for example, that every seller sells his commodity ten per cent above its value. Ceteris paribus [other things being equal], each loses again as a buyer what he gained as a seller. It would be exactly the same as if the value of money had fallen by 10 per cent. The reverse, but with the same result, would occur if all buyers bought their commodities 10 per cent below their value. We come not a whit closer to the solution if we assume that every commodity possessor as a producer sells his commodities above their value and as a consumer buys them above their value.

The consistent representatives of the illusion that surplus-value arises from a nominal price surcharge on commodities always presuppose the existence of a class which buys without ever selling, which consumes without producing. At this stage of our investigation, the existence of such a class is as yet inexplicable. But let us assume that it exists. Where does this class obtain the money with which to buy continually? Obviously from the commodity producers, on the basis of some legal title or by force, without exchange. To sell such a class commodities above their value means nothing but getting back again part of the money that has been given away gratuitously. It was in this way that the cities of Asia Minor, when they paid tribute to the Romans, recovered part of the money by cheating the Romans in trade; nevertheless, the cities were the ones cheated. This is, therefore, no method of creating surplus-value.

Let us consider the case of cheating. A sells B wine worth £40 in exchange for corn worth £50. A has gained £10 and B has lost £10, yet both together still possess only £90, as before. Value has been transferred, but not created. The entire capitalist class of a country cannot enrich itself as a whole by cheating each other.

Consequently: if equivalents are exchanged, no surplus-value arises, and if non-equivalents are exchanged, no surplus-value arises either. The circulation of commodities creates no new value. That is the reason why the two oldest and most popular forms of capital, merchant’s capital and interest-bearing capital, are completely left out of account here. To explain the surplus-value appropriated by these two forms of capital as anything other than the result of mere cheating requires a number of intermediate links that are still missing at this stage of the inquiry. Later we shall see that both are merely derivative forms, and we shall also find out why both appear historically long before modern capital.

Surplus-value cannot therefore arise from the circulation of commodities. But can it arise outside it? Outside the sphere of circulation, the commodity owner is simply a producer of his own commodity, whose value is determined by the quantity of his own labour contained in it, measured according to a definite social law. This value is expressed in money of account, say, in a price of £10. But this price of £10 is not at the same time a price of £11; the labour contained in the commodity creates value, but it does not create self-valorising value; it can add new value to existing value, but only through the addition of new labour. How then could the commodity owner, outside the sphere of circulation, without coming into contact with other commodity owners, be capable of producing surplus-value or, in other words, of converting commodity or money into capital?

“Capital cannot therefore spring from circulation, and it can just as little spring from non-circulation. It must have its origin both in circulation and not in circulation. … The transformation of money into capital has to be developed on the basis of the laws immanent in the exchange of commodities, so that the exchange of equivalents serves as the starting-point. Our money-owner, as yet present only as a capitalist caterpillar, must buy his commodities at their value, sell them at their value, and yet at the end of the process withdraw more value than he threw in. His unfolding into a butterfly must take place in the sphere of circulation, and must not take place in it. These are the conditions of the problem. Hic Rhodus, hic salta!”

And now for the solution:

“The change in the value of the money that is to be converted into capital cannot take place in this money itself, for as a means of purchase and as a means of payment it merely realises the price of the commodity it buys or pays, while, if it persists in its own form, it becomes petrified into a fossil of unchangeable magnitude of value. Just as little can the change arise from the second act of circulation, the re-sale of the commodity, for this act merely converts the commodity back from its bodily form into the money-form. The change must therefore take place in the commodity that is bought in the first act, M—C, but not in its value, for equivalents are exchanged, and the commodity is paid for at its value. The change can therefore only originate from its use-value as such, i.e., from its consumption. In order to extract value from the consumption of a commodity, our money-owner would have to be so lucky as to discover, within the sphere of circulation, on the market, a commodity whose use-value possesses the peculiar property of being a source of value, whose actual consumption is therefore itself an embodiment of labour, and consequently a creation of value. And the money-owner does find such a specific commodity on the market — the capacity for labour, or labour-power.”

By labour-power, or capacity for labour, we understand the aggregate of those physical and mental capabilities existing in the bodily form, the living personality, of a human being, which he sets in motion whenever he produces use-values of any kind.

In order, however, that the money-owner may find labour-power in the market as a commodity, various conditions must be fulfilled. The exchange of commodities, of itself, implies no other relations of dependence than those which spring from its own nature. On this presupposition, labour-power can appear on the market as a commodity only if, and in so far as, it is offered for sale or sold by its own possessor, the person of whom it is the labour-power, as a commodity. In order that its possessor may sell it as a commodity, he must be able to dispose of it, hence be the free proprietor of his capacity for labour, of his person. He and the money-owner meet in the market and enter into relations with each other as owners of commodities on an equal footing, distinguished only in that one is a buyer, the other a seller. The continuance of this relation requires that the owner of the labour-power sells it only for a definite period of time, for if he sells it in a lump, once and for all, he sells himself, converts himself from a free man into a slave, from a commodity owner into a commodity. … The second essential condition, in order that the money-owner may find labour-power in the market as a commodity, is that its possessor, instead of being able to sell commodities in which his labour has been objectified, must rather be compelled to offer for sale as a commodity his labour-power itself, which exists only in his living body.

In order that a man may sell commodities distinct from his labour-power, he must of course possess means of production, e.g., raw materials, instruments of labour, etc. He cannot make boots without leather. He also requires means of subsistence. Nobody can live on the products of the future, hence not on use-values whose production is as yet unfinished; and just as on the first day of his appearance on the earthly stage, man must still consume every day before and while he produces. If products are produced as commodities, they must be sold after they have been produced, and they can satisfy the needs of the producer only after the sale. To the time of production the time necessary for sale is added.

For the transformation of money into capital, therefore, the money-owner must find the free worker in the commodity market, free in the double sense that as a free person he disposes of his labour-power as his own commodity, and that, on the other hand, he has no other commodities to sell, is free of all things necessary for the realisation of his labour-power.

The question why this free worker confronts him in the sphere of circulation does not interest the money-owner, who finds the labour market as a particular department of the commodity market. And for the present it interests us just as little. We hold fast theoretically to the fact, as the money-owner does practically. One thing, however, is clear. Nature does not produce on the one hand money- or commodity-owners, and on the other hand mere owners of their own labour-power. This relation is not one of natural history, nor is it a social one common to all periods of history. It is obviously itself the result of a preceding historical development, the product of many economic revolutions, of the downfall of a whole series of older formations of social production.

The economic categories we have examined earlier also bear their historical hallmark. The existence of the product as a commodity involves certain historical conditions. In order to become a commodity, the product must not be produced as an immediate means of subsistence for the producer himself. Had we investigated further the question under what circumstances all, or even the majority of, products take the form of commodities, we should have found that this occurs only on the basis of a very specific mode of production, the capitalist one. Such an investigation, however, lay beyond the analysis of the commodity. The production and circulation of commodities can take place even though the vast mass of products, destined directly for self-consumption, are not turned into commodities, and the social process of production is therefore by no means as yet dominated in its entire breadth and depth by exchange-value. … If we consider money, it presupposes a certain level of commodity exchange. The particular forms of money — mere commodity equivalent, or medium of circulation, or means of payment, hoard, and world money — point, according to the varying extent and relative preponderance of one or the other function, to very different stages of the social process of production. Nevertheless, experience shows that a relatively weakly developed circulation of commodities suffices for the formation of all these forms. It is otherwise with capital. Its historical conditions of existence are by no means given with the circulation of commodities and money. It arises only where the owner of the means of production and subsistence finds the free worker as seller of his labour-power in the market, and this one historical condition encompasses a world history. Capital, therefore, announces from the outset a new epoch of the social process of production.

This peculiar commodity, labour-power, is now to be examined. Like all other commodities, it possesses an exchange-value; this value is determined, like that of all other commodities, by the labour-time necessary for its production, and hence also for its reproduction. The value of labour-power is the value of the means of subsistence necessary for the maintenance of its possessor in normal working capacity. These means of subsistence depend on the climate and other natural conditions, as well as on a historically given standard of life in each country. They change, but for a given country and a given epoch they are fixed. Furthermore, they include the means of subsistence for the replacements of the worn-out workers, i.e., for their children, so that this peculiar race of commodity owners may perpetuate itself. They also include, in the case of skilled labour, the costs of education.

The minimum limit of the value of labour-power is the value of the physically indispensable means of subsistence. If the price of labour-power falls to this minimum, it falls below its value, for the latter presupposes a normal quality of labour-power, not a stunted one.

It follows from the nature of labour that labour-power is consumed only after the contract of sale has been concluded; and in all countries with a capitalist mode of production, labour is paid for after it has been performed. Everywhere, therefore, the worker grants credit to the capitalist. Mr. Marx cites some interesting examples from parliamentary documents of the practical consequences of this credit advanced by the worker; for these examples we refer the reader to the book itself.

With the consumption of labour-power, its purchaser simultaneously produces commodities and surplus-value; in order to investigate this, we must leave the sphere of circulation and enter the sphere of production.

Here we at once discover that the labour process has a twofold character. On the one hand, it is the simple process of producing use-values; as such it can and must be common to all historical forms of society’s existence. On the other hand, this process, as already mentioned, proceeds under the specific conditions of capitalist production. These we must now examine.

The labour process on a capitalist basis has two peculiarities. First, the worker works under the control of the capitalist, who sees to it that nothing is wasted and that no more than the socially necessary quantum of labour is expended on each individual product. Second, the product is the property of the capitalist, since the process itself takes place between two things belonging to him: labour-power and means of labour.

The capitalist is interested in use-value only in so far as it is the embodiment of exchange-value, and above all of surplus-value. His aim is to produce a commodity whose value is higher than the sum of values invested in its production. How can this happen?

Let us take any commodity, e.g. cotton yarn, and analyse the quantity of labour objectified in it. Suppose that 10 lbs. of cotton worth 10 sh. are required to produce 10 lbs. of yarn (we ignore waste). Furthermore, certain means of labour are required: a steam-engine, combing machines and other machinery, coal, lubricants, etc. For the sake of simplicity we shall call all this “spindles” and assume that the wear and tear, coal, etc., necessary for spinning 10 lbs. of yarn represent 2 sh. Thus we have 10 sh. for cotton and 2 sh. for spindles = 12 sh. If 12 sh. represent the product of 24 hours of labour or two working days, then the cotton and spindles objectify two working days in the yarn. How much is now added by the spinning?

Let us assume that the value of labour-power per diem is 3 sh., and that these 3 sh. represent the labour of six hours. Further, that a worker takes six hours to spin 10 lbs. of yarn. In this case, 3 sh. have been added to the product by labour; the value of the 10 lbs. of yarn is 15 sh., or 1 sh. 6 d. per lb.

This process is very simple, yet no surplus-value arises from it. Nor can it, for in capitalist production things do not proceed so simply.

“Let us look more closely. The daily value of labour-power was 3 sh., because half a working day is objectified in it. That half a working day is required to keep it alive for 24 hours in no way prevents the worker from working a whole day. The value of labour-power and the value it creates in the labour process are therefore two entirely different magnitudes. It was this difference in value that the capitalist had in mind when he purchased labour-power. Its useful quality of making yarn or boots was merely a conditio sine qua non, because labour must be expended in a useful form in order to form value. But what was decisive was the specific use-value of this commodity, its property of being a source of value, and of more value than it itself has. This is the specific service which the capitalist expects from it. And in doing so he acts in accordance with the eternal laws of commodity exchange. In fact, the seller of labour-power, like the seller of every other commodity, realises its exchange-value and alienates its use-value. He cannot obtain the one without giving up the other. The use-value of labour-power, labour itself, belongs as little to its seller as the use-value of oil sold belongs to the oil dealer. The money-owner has paid the value per diem of labour-power; to him therefore belongs its use during the day, the day’s labour. The circumstance that the daily maintenance of labour-power costs only half a working day, although labour-power can function, can work, a whole day, and that consequently the value which its use during a day creates is twice as great as its own daily value, is a piece of extraordinary luck for the buyer, but by no means an injustice to the seller.”

So the worker works 12 hours, spins 20 lbs. of yarn, representing 20 sh. of cotton and 4 sh. of spindles, etc., and his labour costs 3 sh., making a total of 27 sh. If 10 lbs. of cotton absorbed 6 hours of labour, then 20 lbs. of cotton have absorbed 12 hours of labour, equal to 6 sh. “In the 20 lbs. of yarn, 5 working days are now objectified, 4 in the consumed mass of cotton and spindles, 1 absorbed by the cotton during the spinning process. The gold expression of 5 working days, however, is 30 sh. This therefore is the price of the 20 lbs. of yarn. The pound of yarn still costs 1 sh. 6 d. But the sum of the values of the commodities thrown into the process was 27 sh. The value of the product has grown by 1/9 over the value advanced for its production. Thus 27 sh. have been transformed into 30 sh. They have posited a surplus-value of 3 sh. The trick has at last succeeded. Money has been transformed into capital.

The working time during which the worker reproduces the value of his labour-power Mr. Marx calls “necessary labour”; the time worked beyond this, during which surplus-value is produced, he calls “surplus-labour”. Necessary labour and surplus-labour together form the “working-day”.

In a working-day, the necessary labour-time is given; but the time devoted to surplus-labour is not fixed by any economic law; it can be longer or shorter within certain limits. It can never be zero, since then the capitalist’s incentive to employ labour would disappear. At the same time, the total length of the working-day can never, for physiological reasons, reach 24 hours. Between a working-day of, say, 6 hours and one of 24 hours there are, however, many intermediate gradations. The laws of commodity exchange require that the working-day be no longer than is compatible with the normal wear and tear of the worker. But what is normal wear and tear? How many hours of daily labour are compatible with it? On this point the opinions of the capitalist and the worker diverge widely, and as there is no higher authority, the question is decided by force. The history of the regulation of the working-day is the history of a struggle over its limits – a struggle between the collective capitalist and the collective worker, between the class of capitalists and the working class.

It is clear, however, that in any social formation in which the use-value of the product is more important than its exchange-value, surplus labour is restricted by a narrower or wider circle of social needs; and that under these circumstances the desire for surplus labour for its own sake does not necessarily exist. Thus we find that in classical antiquity surplus labour in its crudest form, the working to death of the labourer, existed almost exclusively in gold and silver mines, where exchange-value in its independent form, as money, was produced.

“But as soon as peoples, whose production still moves within the lower forms of slave labour, corvée labour, etc., are drawn into a world market dominated by the capitalist mode of production, which develops the sale of their products abroad as their predominant interest, the civilised horrors of over-work are grafted onto the barbarous horrors of slavery, serfdom, etc. Hence the negro labour in the southern states of the American Union preserved a moderately patriarchal character, so long as production was mainly directed to immediate self-sufficiency. In proportion, however, as the export of cotton became the vital interest of those states, the over-working of the negro, here and there the consumption of his life in seven years of labour, became a factor of a calculated and calculating system… similarly with corvée labour, e.g. in the Danubian Principalities.”
S. 250|

Here the comparison with capitalist production becomes particularly interesting, because surplus labour in corvée labour possesses an independent, sensuously perceptible form.

“Suppose the working day consists of 6 hours of necessary labour and 6 hours of surplus labour. Then the free labourer gives the capitalist 36 hours of surplus labour per week. It is the same as if he worked 3 days in the week for himself and 3 days in the week gratis for the capitalist. But this is not visible. Surplus labour and necessary labour merge into one another. I can, therefore, express the same relationship also by saying, for instance, that the labourer works 30 seconds in every minute for himself and 30 seconds for the capitalist, etc. It is different with corvée labour. The necessary labour, which the Wallachian peasant performs for his own maintenance, is spatially separated from his surplus labour for the boyar. The one he carries out on his own field, the other on the boyar’s estate. Both parts of the labour time, therefore, exist independently, side by side. In the form of corvée labour, surplus labour is exactly separated from necessary labour.”
S. 251|

We must refrain from quoting further interesting examples from the modern social history of the Danubian Principalities, by which Mr Marx proves that the boyars, supported by Russian intervention, know just as well how to suck out surplus labour as any capitalist employer. But what the Règlement organique, through which the Russian General Kisselew gave the boyars almost unlimited power over the labour of the peasants, expresses positively, the English Factory Acts express negatively.

“These laws curb the passion of capital for a limitless draining of labour-power, by forcibly limiting the working day by state regulation, and that by a state that is ruled by capitalist and landlord. Apart from a labour movement that swells daily more threateningly, the limiting of factory labour was dictated by the same necessity that spread guano over the English fields. The same blind lust for plunder that in the one case exhausted the soil had, in the other, seized the vital force of the nation at the root. Periodic epidemics spoke here as clearly as did the dwindling stature of soldiers in Germany and France.”
S. 253|

In order to demonstrate the tendency of capital to lengthen the working day beyond every reasonable measure, Mr Marx quotes at length from the reports of the factory inspectors, the commission for the investigation of child labour, from reports on public health and other parliamentary documents, and sums up in the following conclusions:

“‘What is a working day?’ What is the length of time during which capital may consume the labour-power whose value per diem it pays? How far may the working day be extended beyond the working time necessary for the reproduction of labour-power itself? To these questions, as we have seen, capital answers: the working day counts daily a full 24 hours, after deduction of the few hours of rest without which labour-power absolutely refuses to perform its renewed service. It is, to begin with, self-evident that the labourer, throughout his whole life-day, is nothing but labour-power, that therefore all his disposable time is by nature and by right labour-time, hence belongs to the self-expansion of capital… But in its measureless blind drive for surplus labour, capital oversteps not only the moral, but even the purely physical maximum limits of the working day… Capital does not ask about the length of life of labour-power… Capitalist production produces the premature exhaustion and the annihilation of labour-power itself. It lengthens the labourer’s production time during a given term by shortening his lifetime.”
S. 279–281|

But is this not against the interest of capital itself? Must not capital, in the course of time, replace the costs of this excessive wear and tear? That may be the case theoretically. In practice the organised slave trade in the interior of the Southern States raised the wearing out of the labour-power of the slave in seven years to a recognised economic principle; in practice the English capitalist relies on the supply of labourers from the rural districts.

“What experience shows to the capitalist in general is a constant surplus-population, i.e. surplus-population in relation to the momentary requirements for the valorisation of capital, although this stream is formed of stunted, quickly passing away, rapidly supplanting, so to speak, prematurely plucked generations of human beings. Indeed, experience also shows to the intelligent observer, on the other hand, how rapidly and deeply capitalist production, which, historically speaking, dates from barely yesterday, has seized the vital force of the people at the root, how the degeneration of the industrial population is only retarded by constant absorption of the naturally arising vital elements from the countryside, and how even the rural labourers, despite fresh air and the principle of natural selection, which rules so omnipotently among them and allows only the strongest individuals to thrive, already begin to die off. Capital, which has such ‘good reasons’ to deny the sufferings of the generation of labourers surrounding it, is in its practical movement determined as little and as much by the prospect of future rotting of humanity and finally the unavoidable depopulation as by the possible fall of the earth into the sun. In every stock-jobbing swindle, everyone knows that the storm must break some day, but everyone hopes that it will strike his neighbour’s head, after he himself has caught the golden rain and brought it to safety. Apres moi le déluge! [After me, the deluge!] is the watchword of every capitalist and of every capitalist nation. Capital is therefore reckless about the health and length of life of the labourer, unless society compels it to be considerate. By and large, however, this does not even depend on the good or bad will of the individual capitalist. Free competition makes the immanent laws of capitalist production valid over the individual capitalist as an external compulsory law.”
S. 284–286|

The establishment of a normal working day is the result of a struggle of many centuries between the capitalist and the labourer. And it is interesting to observe the two opposite currents in this struggle. At first, the laws aimed at compelling the labourers to work longer; from the first Statute of Labourers, enacted in the 23rd year of the reign of Edward III (1349), right up to the 18th century, the ruling classes never succeeded in squeezing out of the labourers the full quantum of possible labour. With the introduction of steam and modern machinery, however, the tables were turned. The introduction of female and child labour threw aside all traditional limits of working time so quickly that the 19th century began with a system of over-work unparalleled in world history, which as early as 1802 forced legislation to establish restrictions on working time. Mr Marx gives a comprehensive account of the history of English factory legislation up to the Factory Act of 1867 and arrives at these conclusions:

1. Machinery and steam lead to over-work at first in the branches of industry in which they are employed, and legal restrictions are therefore first introduced in these branches. Subsequently, however, we find that this system of over-work has spread to almost all branches, even to those in which no machinery is employed or in which the most primitive modes of production continue to exist (see the reports of the commission for the investigation of child labour).

2. With the introduction of female and child labour into the factories, the isolated “free” labourer loses his power of resistance to the encroachments of capital and must submit unconditionally. This compels him to common resistance; the struggle of class against class, of the collective labourer against the collective capitalist begins.

When we now return to the moment at which we assumed that our “free” and “equal” labourer enters into a contract with the capitalist, we find that much has essentially changed in the process of production. This contract, on the part of the labourer, is no free contract. The daily time during which he is free to sell his labour-power is the time for which he is forced to sell it; and it is only the mass opposition of the labourers that enforces the introduction of a state law to prevent them from selling themselves and their children into death and slavery by “voluntary” contract. “In place of the pompous catalogue of the ‘inalienable rights of man’ steps the modest Magna Charta of a legally limited working day.”
S. 249–259|

Next we have to analyse the rate of surplus-value and its relation to the mass of surplus-value produced. As before, we assume in this investigation that the value of labour-power is a given, constant magnitude.

Under this assumption, the rate also determines the mass of surplus-value which the individual labourer supplies to the capitalist in a given time. If the daily value of our labour-power is 3 sh., which embody 6 hours of labour, and the rate of surplus-value is 100 per cent, then the variable capital of 3 sh. daily produces a surplus-value of 3 sh., or the labourer supplies daily 6 hours of surplus labour.

Since variable capital is the money expression of the value of all the labour-powers simultaneously employed by one capitalist, the mass of surplus-value produced by these labour-powers is obtained by multiplying the variable capital by the rate of surplus-value; in other words, it is determined by the relation between the number of simultaneously employed labour-powers and the degree of exploitation. Both factors can vary, so that a decrease in the one can be compensated by an increase in the other. A variable capital required to employ 100 workers at a rate of surplus-value of 50 per cent (say 3 hours’ daily surplus labour) will not produce a higher surplus-value than half this variable capital which employs 50 workers at a rate of surplus-value of 100 per cent (say 6 hours’ daily surplus labour). Under certain circumstances and within certain limits, the supply of labour at the disposal of capital can thus become independent of the supply of workers.

This increase of surplus-value by raising its rate has, however, its absolute limits. Whatever the value of labour-power may be, whether it represents two or ten hours’ necessary labour-time, the total value a worker produces day after day can never reach the value in which 24 hours’ labour is objectified. In order to obtain an equal mass of surplus-value, the variable capital can only be replaced within these limits by lengthening the working day. This will be important later for explaining various phenomena arising from the two contradictory tendencies of capital: 1. to reduce the number of workers employed, i.e., the magnitude of the variable capital, and 2. to produce the greatest possible mass of surplus labour.

For a given country and a given length of the working day, surplus-value can only be increased by increasing the number of workers, i.e., the population; this increase forms the mathematical limit for the production of surplus-value by the total capital of that country. If, on the other hand, the number of workers is given, this limit is formed by the possible lengthening of the working day. It will be seen later that this law holds only for the form of surplus-value analysed so far.

At this stage of our investigation we establish that not every sum of money can be transformed into capital; that for this a definite minimum exists: the cost of a single labour-power and of the means of labour needed to set it in motion. Supposing the rate of surplus-value to be 50 per cent, our would-be capitalist would then have to employ two workers in order himself to live like a worker. He could, however, save nothing, but the purpose of capitalist production is not merely the maintenance of wealth, but also and above all its increase.

“In order that he may live only twice as well as an ordinary worker and reconvert half of the surplus-value produced into capital, he would have to raise the minimum of the capital advanced by eight times, together with the number of workers. Admittedly he himself, like his workers, can put his hand directly to the production process, but then he is also only a hybrid between capitalist and worker, a ‘small master’. A certain level of capitalist production requires that the capitalist be able to employ the whole time during which he functions as a capitalist, i.e., as personified capital, in the appropriation and hence control of the labour of others and in the sale of the products of this labour. The transformation of the handicrafts master into a capitalist was forcibly sought to be prevented by the guild system of the Middle Ages, by limiting the number of workers a single master was allowed to employ to a very low maximum. The possessor of money or commodities only really becomes a capitalist where the minimum sum advanced for production far exceeds the medieval maximum. Here, as in natural science, the correctness of the law discovered by Hegel in his ‘Logic’, that merely quantitative changes on a certain point pass over into qualitative differences, is confirmed.” |Karl Marx, Das Kapital, I. Band, MEW Bd. 23, S. 326/327|

The minimum of the sum of value required to transform a possessor of money or commodities into a capitalist varies at different stages of development of capitalist production, and at a given stage for different branches of business.

During the production process we have just analysed in detail, the relation between capitalist and worker has undergone an essential change. In the first place, capital has developed into command over labour, i.e., over the worker himself. The personified capital, the capitalist, sees to it that the worker performs his work regularly, carefully, and with the proper degree of intensity.

“Capital further developed into a coercive relation, compelling the working class to perform more labour than the narrow circle of its own life-needs prescribes. And as producer of the industriousness of others, as pumper-out of surplus labour and exploiter of labour-power, it surpasses all earlier systems of production based on direct compulsory labour in energy, measurelessness and effectiveness.

Capital at first subordinates labour on the basis of the technical conditions within which it historically finds it. It therefore does not immediately alter the mode of production. The production of surplus-value in the form hitherto considered, by simple lengthening of the working day, accordingly appeared independent of any change in the mode of production itself. It was no less effective in the old-fashioned bakery than in the modern cotton spinning mill.

If we consider the production process from the standpoint of the labour process, the worker relates to the means of production not as capital, but as mere means and material of his purposive productive activity. In a tannery, e.g., he treats the hides as his mere object of labour. It is not the capitalist for whom he tans the hide. It is different as soon as we consider the production process from the standpoint of the valorisation process. The means of production at once transformed themselves into means of absorbing the labour of others.

There is, however, yet another form of surplus-value. When the outermost limit of the working day has been reached, the capitalist still has another means of increasing surplus labour: by raising the productive power of labour, and thereby lowering the value of labour-power and shortening the necessary labour-time. This form of surplus-value will be examined in a second article.

Footnotes by Friedrich Engels

(1) Das Kapital. Von Karl Marx. Erster Band. Hamburg, Meißner, 1867.

(2) Where “value” is used here without further specification, it always means exchange-value.

(3) We must note here that surplus-value is by no means identical with profit.