Wage Labour and Capital

Contents

1. Publishers’ Note (1902) 3 min 3

   The New York Labor News Company introduces its volume: Harriet E. Lothrop’s translation of Engels’s 1891 edition of Wage-Labor and Capital, checked against the German by Herman Simpson, who added the notes, and Florence Kelley’s translation of the Free Trade speech with Engels’s introduction. It compares the pamphlet with Marx’s later Value, Price and Profit and Capital.

2. Engels’s Introduction (1891) 23 min 16

   Engels explains why he revised Marx’s 1849 text for a mass propaganda edition. His one essential change: the worker sells not his “labour” but his “labour-power.” Classical economics, treating labour as a commodity with a value, ran into contradictions: a worker paid $3 for twelve hours adds $6 of value, so labour seems to have two values. The way out is that the worker sells his capacity to work, whose value is the cost of keeping him alive, while his labour creates more value than that. Engels ends by predicting a new social order in which the enormous productive powers of society are used for all.

3. 1 Preliminary 4 min 9

   Marx introduces the series. Having reported the political struggles of 1848, he now turns to the economic relations underneath them: the relation of wage labour to capital, the ruin of the middle classes, and England’s domination of the world market. He promises to write simply, for workers. Only the first part was ever published.

4. 2 What Are Wages? 10 min 7

   Wages appear to be the price of labour, but what the worker sells is labour-power, a commodity like sugar, measured by the clock rather than the scales. Wages are not a share of the product: they are paid out of capital already on hand, like the price of the loom and the yarn. The worker sells his life-activity in order to live, so work becomes a sacrifice of life rather than its expression. Unlike the slave or serf, the free labourer sells himself by the hour and can leave any capitalist but not the capitalist class.

5. 3 By What Is the Price of a Commodity Determined? 11 min 5

   Prices are set by competition among sellers, among buyers, and between the two, that is, by supply and demand. But supply and demand themselves move around a fixed point, the cost of production: high prices draw capital in, low prices drive it out. The fluctuations, with their crises and ruin, are the very mechanism through which prices are forced toward costs. Since all costs reduce to labour, price is ultimately determined by labour-time.

6. 4 By What Are Wages Determined? 4 min 3

   Wages, as the price of labour-power, follow the same law. The cost of producing labour-power is the cost of maintaining and training the worker and of raising the next generation, as a manufacturer sets aside funds to replace a worn-out machine. This determines a “minimum of wages,” around which the wages of the working class as a whole fluctuate.

7. 5 The Nature and Growth of Capital 7 min 7

   Economists define capital as accumulated labour used for new production, but a cotton-spinning machine becomes capital only under particular social conditions, just as a black man becomes a slave only under particular conditions. Relations of production change with the forces of production, and their totality makes up a type of society. Capital is a bourgeois relation of production: a sum of exchange values that preserves and multiplies itself by exchange with living labour-power. It presupposes a class that owns nothing but its ability to work.

8. 6 Relation of Wage-Labor to Capital 11 min 10

   In the exchange, the worker gets means of subsistence that he consumes, while the capitalist gets labour that produces more than it costs. Capital and wage labour condition each other. The worker produces capital, the power that dominates him. The fastest growth of capital is the best condition for workers, yet a rise in wages beside a faster rise in wealth leaves the worker relatively worse off: a small house beside a palace shrinks into a hut. Marx distinguishes nominal wages, real wages and relative wages, the worker’s share compared with the capitalist’s.

9. 7 The General Law That Determines the Rise and Fall of Wages and Profits 6 min 4

   Out of the new value created by the worker come both wages and profit. Real wages can rise while relative wages fall. The general law is that wages and profits stand in inverse proportion: one rises as the other falls. Gains from cheating other capitalists cancel out, and better machines produce more goods but not more value.

10. 8 The Interests of Capital and Wage-Labor Are Diametrically Opposed—Effect of Growth of Productive Capital on Wages 9 min 6

    The interests of capital and wage labour are therefore opposed. Even when wages rise, profits rise faster, and the social gap widens: workers forge their own “golden chains.” Growing capital intensifies competition among capitalists, who must cut costs through division of labour and machinery. The first to innovate undersells his rivals and gains an extra profit until the new method spreads, prices fall, and the race begins again.

11. 9 Effect of Capitalist Competition on the Capitalist Class, the Middle Class, and the Working Class 14 min 14

    Competition drives an endless revolution in methods of production. Its effect on workers: division of labour and machinery simplify work, destroy skills and increase competition among workers, who in working harder compete against themselves. Machinery replaces men with women and children and throws workers out of work, and the economists’ promise of compensating employment is false. Small manufacturers and rentiers sink into the working class, and crises grow more frequent as new markets run out. The more rapidly capital grows, the more rapidly competition among workers grows; and yet rapid growth of capital remains the most favourable condition for wage labour. The series breaks off here.