Wage-Labor and Capital – Karl Marx

Marx is, in this section, providing a cursory review of his analysis of the relationship between workers and capital. Marx goes to significant pains to point out that what laborers sell capitalists is – in the eyes of the capitalist – a commodity pretty much like any other. If a laborer sold their labor, according to Marx, they would be selling themselves. In fact, what capital buys is the capacity to work, not the work, and that capacity is called labor-power. While seemingly arcane, this is important.

The capitalist pays the laborer not according to the value the laborer contributes to the production process but according to the cost of bringing the laborer back the next day at the same level of skill and productivity. Commodities – in the aggregrate – are bought and sold at their value, not a penny more or a penny less. And the value of labor-power is the cost of the commodities necessary to reproduce labor – you can see, here, why Marx acknowledges the necessary cost of having a family (producing new workers) and the higher costs of reproducing higher skilled, more sophisticated or professional-managerial laborers (and their families) relative to that of deskilled industrial workers.

You can see, here – if you believe, as Marx indicates in the Manifesto, that the State is the executive of the capitalist class as a whole – why low gasoline, fuel oil, home appliance, clothing and food prices are so important… they all mutually reinforce each other in holding wages down… even if they generate costly and irrational foreign, industrial, consumer and agricultural policies. You might also see how cutting costs in these fields is often as technologically-driven as industrial production… how work relations, between capital, management and labor, are largely driven by technological imperatives.

Here, capital is defined as not so much financial investments, industrial machinery or any other thing, but as the network of things and people bound up in these kinds of relationships. The technologically-driven imperatives of these relationships means not only the perpetual pursuit of ever-greater profit from ever wider areas tied to serving ever more nichified needs but also that living labor, people, serve the interests and must follow the patterns of accumulated labor, machines, rather than the other way around.

It is important, as well, that workers must not only sell their labor-power to a capitalist in order to have money to live but that they must buy (or rent) the necessities of life from other capitalists with that money… it is for this reason that laborers – as individuals and as a class – belong not to individual capitalists but to the capitalist class in toto.

The key, of course, is that the laborer is only paid in wages equal to the value of regularly returning her to work in the same condition as when she started the job. The problem is that, given the richness of nature and the hypercompetitive overproduction of consumer goods, it is possible – in fact it is necessary – for workers to work more hours each day than the number of hours necessary for them to contribute the value of the housing, transportation and consumer goods necessary for their reproduction (and that of their families).

In this way, capital needs labor to exist and laborers need jobs to exist and both need the commodities the laborers produce to sell successfully in the marketplace in order to do well. Two things occur here. The first is that a disproportionate share of profits always goes to the capitalist – the rich get richer and the poor get richer but the rich get richer far faster than the poor – and success means expanding production, hiring more workers, which means a need for more workers, which means a larger population of workers and people more generally.

This is fine and dandy until competition generates a saturated market and prices collapse… and all capitalists either intensify production – to squeeze a greater disproportionate share out of their workers, cut wages, fire workers and/or close plants. The first further depresses prices by intensifying overproduction – especially if it is done widely. The latter, throw folks out of work, which on the one hand means that there is greater competition between workers for jobs and on the other hand means that those without work – and those competing to work for lower wages (which is what happens when there are more folks than jobs) have to buy less… which can generate ever-widening circles of both overproduction and unemployment across sector after sector of the downwardly spiraling economy.

The only solution is technological innovation – produce even more, more efficiently, with (usually) far fewer workers. On this one hand, this increases the industrial division of labor and produces new opportunities for profits and employment. On the other hand, this works great for the early adopters but, as Marx points out, pretty soon thereafter competitive pressures drive everyone else – who has survived – to catch up and the crisis cycle begins again. Is it any wonder Marx sees capitalism as contradictory, crisis ridden and in need of revolutionary change?