Wage, Labour and Capital.
By Karl Marx.
First Published: April 1849.
PART II.
THE NATURE AND GROWTH OF CAPITAL
Capital consists of raw materials, instruments of labor, and means of subsistence of all kinds, which are employed in producing new raw materials, new instruments, and
new means of subsistence. All these components of capital are created by labour,
products of labour, accumulated labour. Accumulated labour that serves as a means to
new production is capital.
So say the economists.
What is a Negro slave? A man of the black race. The one explanation is worthy of the
other.
A Negro is a Negro. Only under certain conditions does he become a slave. A cottonspinning
machine is a machine for spinning cotton. Only under certain conditions does
it become capital. Torn away from these conditions, it is as little capital as gold is itself
money, or sugar is the price of sugar.
In the process of production, human beings work not only upon nature, but also upon
one another. They produce only by working together in a specified manner and
reciprocally exchanging their activities. In order to produce, they enter into definite
connections and relations to one another, and only within these social connections and
relations does their influence upon nature operate – i.e., does production take place.
These social relations between the producers, and the conditions under which they
exchange their activities and share in the total act of production, will naturally vary
according to the character of the means of production. With the discover of a new
instrument of warfare, the firearm, the whole internal organization of the army was
necessarily altered, the relations within which individuals compose an army and can
work as an army were transformed, and the relation of different armies to another was
likewise changed.
We thus see that the social relations within which individuals produce, the social
relations of production, are altered, transformed, with the change and development of
the material means of production, of the forces of production. The relations of
production in their totality constitute what is called the social relations, society, and,
moreover, a society at a definite stage of historical development, a society with peculiar,
distinctive characteristics. Ancient society, feudal society, bourgeois (or capitalist)
society, are such totalities of relations of production, each of which denotes a particular
stage of development in the history of mankind.
Capital also is a social relation of production. It is a bourgeois relation of production,
a relation of production of bourgeois society. The means of subsistence, the instruments
of labour, the raw materials, of which capital consists – have they not been produced
and accumulated under given social conditions, within definite special relations? Are
they not employed for new production, under given special conditions, within definite
social relations? And does not just the definite social character stamp the products which
serve for new production as capital?
Capital consists not only of means of subsistence, instruments of labour, and raw
materials, not only as material products; it consists just as much of exchange values. All
products of which it consists are commodities. Capital, consequently, is not only a sum
of material products, it is a sum of commodities, of exchange values, of social
magnitudes. Capital remains the same whether we put cotton in the place of wool, rice
in the place of wheat, steamships in the place of railroads, provided only that the cotton,
the rice, the steamships – the body of capital – have the same exchange value, the same
price, as the wool, the wheat, the railroads, in which it was previously embodied. The
bodily form of capital may transform itself continually, while capital does not suffer the
least alteration.
But though every capital is a sum of commodities – i.e., of exchange values – it does
not follow that every sum of commodities, of exchange values, is capital.
Every sum of exchange values is an exchange value. Each particular exchange value
is a sum of exchange values. For example: a house worth 1,000 pounds is an exchange
value of 1,000 pounds: a piece of paper worth one penny is a sum of exchange values of
100 1/100ths of a penny. Products which are exchangeable for others are commodities.
The definite proportion in which they are exchangeable forms their exchange value, or,
expressed in money, their price. The quantity of these products can have no effect on
their character as commodities, as representing an exchange value , as having a certain
price. Whether a tree be large or small, it remains a tree. Whether we exchange iron in
pennyweights or in hundredweights, for other products, does this alter its character: its
being a commodity, or exchange value? According to the quantity, it is a commodity of
greater or of lesser value, of higher or of lower price.
How then does a sum of commodities, of exchange values, become capital?
Thereby, that as an independent social power – i.e., as the power of a part of society –
it preserves itself and multiplies by exchange with direct, living labour-power.
The existence of a class which possesses nothing but the ability to work is a necessary
presupposition of capital.
It is only the dominion of past, accumulated, materialized labour over immediate
living labour that stamps the accumulated labour with the character of capital.
Capital does not consist in the fact that accumulated labour serves living labour as a
means for new production. It consists in the fact that living labour serves accumulated
labour as the means of preserving and multiplying its exchange value.
RELATION OF WAGE-LABOUR TO CAPITAL
What is it that takes place in the exchange between the capitalist and the wagelabourer?
The labourer receives means of subsistence in exchange for his labour-power; the
capitalist receives, in exchange for his means of subsistence, labour, the productive
activity of the labourer, the creative force by which the worker not only replaces what
he consumes, but also gives to the accumulated labour a greater value than it previously
possessed. The labourer gets from the capitalist a portion of the existing means of
subsistence. For what purpose do these means of subsistence serve him? For immediate
consumption. But as soon as I consume means of subsistence, they are irrevocably lost
to me, unless I employ the time during which these means sustain my life in producing
new means of subsistence, in creating by my labour new values in place of the values
lost in consumption. But it is just this noble reproductive power that the labourer
surrenders to the capitalist in exchange for means of subsistence received.
Consequently, he has lost it for himself.
Let us take an example. For one shilling a labourer works all day long in the fields of
a farmer, to whom he thus secures a return of two shillings. The farmer not only
receives the replaced value which he has given to the day labourer, he has doubled it.
Therefore, he has consumed the one shilling that he gave to the day labourer in a
fruitful, productive manner. For the one shilling he has bought the labour-power of the
day-labourer, which creates products of the soil of twice the value, and out of one
shilling makes two. The day-labourer, on the contrary, receives in the place of his
productive force, whose results he has just surrendered to the farmer, one shilling, which
he exchanges for means of subsistence, which he consumes more or less quickly. The
one shilling has therefore been consumed in a double manner – reproductively for the
capitalist, for it has been exchanged for labour-power, which brought forth two
shillings; unproductively for the worker, for it has been exchanged for means of
subsistence which are lost for ever, and whose value he can obtain again only by
repeating the same exchange with the farmer. Capital therefore presupposes wage-
labour; wage-labour presupposes capital. They condition each other; each brings the
other into existence.
Does a worker in a cotton factory produce only cotton? No. He produces capital. He
produces values which serve anew to command his work and to create by means of it
new values.
Capital can multiply itself only by exchanging itself for labour-power, by calling
wage-labour into life. The labour-power of the wage-labourer can exchange itself for
capital only by increasing capital, by strengthening that very power whose slave it is.
Increase of capital, therefore, is increase of the proletariat, i.e., of the working class.
And so, the bourgeoisie and its economists maintain that the interest of the capitalist
and of the labourer is the same. And in fact, so they are! The worker perishes if capital
does not keep him busy. Capital perishes if it does not exploit labour-power, which, in
order to exploit, it must buy. The more quickly the capital destined for production – the
productive capital – increases, the more prosperous industry is, the more the bourgeoisie
enriches itself, the better business gets, so many more workers does the capitalist need,
so much the dearer does the worker sell himself. The fastest possible growth of
productive capital is, therefore, the indispensable condition for a tolerable life to the
labourer.
But what is growth of productive capital? Growth of the power of accumulated labour
over living labour; growth of the rule of the bourgeoisie over the working class. When
wage-labour produces the alien wealth dominating it, the power hostile to it, capital,
there flow back to it its means of employment – i.e., its means of subsistence, under the
condition that it again become a part of capital, that is become again the lever whereby
capital is to be forced into an accelerated expansive movement.
To say that the interests of capital and the interests of the workers are identical,
signifies only this: that capital and wage-labour are two sides of one and the same
relation. The one conditions the other in the same way that the usurer and the borrower
condition each other.
As long as the wage-labourer remains a wage-labourer, his lot is dependent upon
capital. That is what the boasted community of interests between worker and capitalists
amounts to.
If capital grows, the mass of wage-labour grows, the number of wage-workers
increases; in a word, the sway of capital extends over a greater mass of individuals.
Let us suppose the most favorable case: if productive capital grows, the demand for
labour grows. It therefore increases the price of labour-power, wages.
A house may be large or small; as long as the neighboring houses are likewise small,
it satisfies all social requirement for a residence. But let there arise next to the little
house a palace, and the little house shrinks to a hut. The little house now makes it clear
that its inmate has no social position at all to maintain, or but a very insignificant one;
and however high it may shoot up in the course of civilization, if the neighboring palace
rises in equal or even in greater measure, the occupant of the relatively little house will
always find himself more uncomfortable, more dissatisfied, more cramped within his
four walls.
An appreciable rise in wages presupposes a rapid growth of productive capital. Rapid
growth of productive capital calls forth just as rapid a growth of wealth, of luxury, of
social needs and social pleasures. Therefore, although the pleasures of the labourer have
increased, the social gratification which they afford has fallen in comparison with the
increased pleasures of the capitalist, which are inaccessible to the worker, in comparison
with the stage of development of society in general. Our wants and pleasures have their
origin in society; we therefore measure them in relation to society; we do not measure
them in relation to the objects which serve for their gratification. Since they are of a
social nature, they are of a relative nature.
But wages are not at all determined merely by the sum of commodities for which they
may be exchanged. Other factors enter into the problem. What the workers directly
receive for their labour-power is a certain sum of money. Are wages determined merely
by this money price?
In the 16th century, the gold and silver circulation in Europe increased in
consequence of the discovery of richer and more easily worked mines in America. The
value of gold and silver, therefore, fell in relation to other commodities. The workers
received the same amount of coined silver for their labour-power as before. The money
price of their work remained the same, and yet their wages had fallen, for in exchange
for the same amount of silver they obtained a smaller amount of other commodities.
This was one of the circumstances which furthered the growth of capital, the rise of the
bourgeoisie, in the 18th century.
Let us take another case. In the winter of 1847, in consequence of bad harvest, the
most indispensable means of subsistence – grains, meat, butter, cheese, etc. – rose
greatly in price. Let us suppose that the workers still received the same sum of money
for their labour-power as before. Did not their wages fall? To be sure. For the same
money they received in exchange less bread, meat, etc. Their wages fell, not because the
value of silver was less, but because the value of the means of subsistence had
increased.
Finally, let us suppose that the money price of labour-power remained the same,
while all agricultural and manufactured commodities had fallen in price because of the
employment of new machines, of favorable seasons, etc. For the same money the
workers could now buy more commodities of all kinds. Their wages have therefore
risen, just because their money value has not changed.
The money price of labour-power, the nominal wages, do not therefore coincide with
the actual or real wages – i.e., with the amount of commodities which are actually given
in exchange for the wages. If then we speak of a rise or fall of wages, we have to keep
in mind not only the money price of labour-power, the nominal wages, but also the real
wages.
But neither the nominal wages – i.e., the amount of money for which the labourer
sells himself to the capitalist – nor the real wages – i.e., the amount of commodities
which he can buy for this money – exhausts the relations which are comprehended in
the term wages.
Wages are determined above all by their relations to the gain, the profit, of the
capitalist. In other words, wages are a proportionate, relative quantity.
Real wages express the price of labour-power in relation to the price of commodities;
relative wages, on the other hand, express the share of immediate labour in the value
newly created by it, in relation to the share of it which falls to accumulated labour, to
capital.
THE GENERAL LAW THAT DETERMINES THE RISE AND FALL
OF WAGES AND PROFITS
We have said: "Wages are not a share of the worker in the commodities produced by
him. Wages are that part of already existing commodities with which the capitalist buys
a certain amount of productive labor-power." But the capitalist must replace these wages
out of the price for which he sells the product made by the worker; he must so replace it
that, as a rule, there remains to him a surplus above the cost of production expended by
him, that is, he must get a profit.
The selling price of the commodities produced by the worker is divided, from the
point of view of the capitalist, into three parts:
First, the replacement of the price of the raw materials advanced by him, in
addition to the replacement of the wear and tear of the tools, machines, and
other instruments of labor likewise advanced by him;
Second, the replacement of the wages advanced; and
Third, the surplus leftover – i.e., the profit of the capitalist.
While the first part merely replaces previously existing values, it is evident that the
replacement of the wages and the surplus (the profit of capital) are as a whole taken out
of the new value, which is produced by the labor of the worker and added to the raw
materials. And in this sense we can view wages as well as profit, for the purpose of
comparing them with each other, as shares in the product of the worker.
Real wages may remain the same, they may even rise, nevertheless the relative wages
may fall. Let us suppose, for instance, that all means of subsistence have fallen 2/3rds in
price, while the day's wages have fallen but 1/3rd – for example, from three to two
shillings. Although the worker can now get a greater amount of commodities with these
two shillings than he formerly did with three shillings, yet his wages have decreased in
proportion to the gain of the capitalist. The profit of the capitalist – the manufacturer's
for instance – has increased one shilling, which means that for a smaller amount of
exchange values, which he pays to the worker, the latter must produce a greater amount
of exchange values than before. The share of capitals in proportion to the share of
labour has risen. The distribution of social wealth between capital and labour has
become still more unequal. The capitalist commands a greater amount of labour with the
same capital. The power of the capitalist class over the working class has grown, the
social position of the worker has become worse, has been forced down still another
degree below that of the capitalist.
What, then, is the general law that determines the rise and fall of wages and profit in
their reciprocal relation?
They stand in inverse proportion to each other. The share of (profit) increases in the
same proportion in which the share of labour (wages) falls, and vice versa. Profit rises in
the same degree in which wages fall; it falls in the same degree in which wages rise.
It might perhaps be argued that the capitalist class can gain by an advantageous
exchange of his products with other capitalists, by a rise in the demand for his
commodities, whether in consequence of the opening up of new markets, or in
consequence of temporarily increased demands in the old market, and so on; that the
profit of the capitalist, therefore, may be multiplied by taking advantage of other
capitalists, independently of the rise and fall of wages, of the exchange value of labourpower;
or that the profit of the capitalist may also rise through improvements in the
instruments of labour, new applications of the forces of nature, and so on.
But in the first place it must be admitted that the result remains the same, although
brought about in an opposite manner. Profit, indeed, has not risen because wages have
fallen, but wages have fallen because profit has risen. With the same amount of another
man's labour the capitalist has bought a larger amount of exchange values without
having paid more for the labour on that account – i.e., the work is paid for less in
proportion to the net gain which it yields to the capitalist.
In the second place, it must be borne in mind that, despite the fluctuations in the
prices of commodities, the average price of every commodity, the proportion in which it
exchanges for other commodities, is determined by its cost of production. The acts of
overreaching and taking advantage of one another within the capitalist ranks necessarily
equalize themselves. The improvements of machinery, the new applications of the
forces of nature in the service of production, make it possible to produce in a given
period of time, with the same amount of labour and capital, a larger amount of products,
but in no wise a larger amount of exchange values. If by the use of the spinning-
machine I can furnish twice as much yarn in an hour as before its invention – for
instance, 100 pounds instead of 50 pounds – in the long run I receive back, in exchange
for this 100 pounds no more commodities than I did before for 50; because the cost of
production has fallen by 1/2, or because I can furnish double the product at the same
cost.
Finally, in whatsoever proportion the capitalist class, whether of one country or of the
entire world-market, distribute the net revenue of production among themselves, the
total amount of this net revenue always consists exclusively of the amount by which
accumulated labour has been increased from the proceeds of direct labour. This whole
amount, therefore, grows in the same proportion in which labour augments capital – i.e.,
in the same proportion in which profit rises as compared with wages.
