May 25, 2021

Wages of Labor

Karl Marx's Economic and Philosophical Manuscripts
First Manuscript
April and August 1844 
1932 the Institute of Marxism-Leninism in the Union of Soviet Socialist Republics

Wages of Labor

Wages are determined by the fierce struggle between capitalist and worker. The capitalist inevitably wins. The capitalist can live longer without the worker than the worker can live without him. Combination among capitalists is habitual and effective, while combination among the workers is forbidden and has painful consequences for them. In addition to that, the landowner and the capitalist can increase their revenues with the profits of industry, while the worker can supplement his income from industry with neither ground rent nor interest on capital. This is the reason for the intensity of competition among the workers. It is, therefore, only for the worker that the separation of capital, landed property, and labor, is a necessary, essential, and pernicious separation. Capital and landed property need not remain constant in this abstraction, as must the labor of the workers.

So, for the worker, the separation of capital, ground rent, and labor, is fatal.

For wages, the lowest and the only necessary rate is that required for the subsistence of the worker during work and enough extra to support a family and prevent the race of workers from dying out. According to [economist Adam] Smith, the normal wage is the lowest which is compatible with common humanity -- i.e., with a bestial existence. [See Smith, The Wealth of Nations, 2 vols., Everyman edition, Vol. I, p. 61.]

The demand for men necessarily regulates the production of men, as of every other commodity. If the supply greatly exceeds the demand, then one section of the workers sinks into beggary or starvation. The existence of the worker is, therefore, reduced to the same condition as the existence of every other commodity. The worker has become a commodity, and he is lucky if he can find a buyer. And the demand on which the worker's life depends is regulated by the whims of the wealthy and the capitalists. If supply exceeds demand, one of the elements which go to make up the price -- profit, ground rent, wages -- will be paid below its price. A part of these elements is, therefore, withdrawn from this application, with the result that the market price gravitates towards the natural price as the central point. But 1. it is very difficult for the worker to direct his labor elsewhere where there is a marked division of labor; and 2. because of his subordinate relationship to the capitalist, he is the first to suffer.

So the worker is sure to lose and to lose most from the gravitation of the market price towards the natural price. And it is precisely the ability of the capitalist to direct his capital elsewhere which either drives the worker, who is restricted to one particular branch of employment, into starvation or forces him to submit to all the capitalist's demands.

The sudden chance fluctuations in market price hit ground rent less than that part of the price which constitutes profit and wages, but they hit profit less than wages. For every wage which rises, there is generally one which remains stationary and another which falls.

The worker does not necessarily gain when the capitalist gains, but he necessarily loses with him. For example, the worker does not gain if the capitalist keeps the market price above the natural price by means of a manufacturing or trade secret, a monopoly or a favorably placed property.

Moreover, the prices of labor are much more constant than the prices of provisions. They are often in inverse proportion. In a dear year, wages drop because of a drop in demand and rise because of an increase in the price of provisions. They, therefore, balance. In any case, some workers are left without bread. In cheap years, wages rise on account of the rise in demand, and fall on account of the fall in the price of provisions. So they balance. [Smith, I, pp. 76-7.]

Another disadvantage for the worker:

The price of the labor of different kinds of workers varies much more than the profits of the various branches in which capital is put to use. In the case of labor, all the natural, spiritual, and social variations in individual activity are manifested and variously rewarded, were as dead capital behaves in a uniform way and is indifferent to real individual activity.

In general, we should note that where worker and capitalist both suffer, the worker suffers in his very existence while the capitalist suffers in the profit on his dead mammon.

The worker has not only to struggle for his physical means of subsistence; he must also struggle for work -- i.e., for the possibility and the means of realizing his activity. Let us consider the three main conditions which can occur in society and their effect on the worker.

(1) If the wealth of society is decreasing, the worker suffers most, although the working class cannot gain as much as the property owners when society is prospering, none suffers more cruelly from its decline than the working class. [Smith, I, p. 230.]

(2) Let us now consider a society in which wealth is increasing. This condition is the only one favorable to the worker. Here, competition takes place among the capitalists. The demand for workers outstrips supply. But:

In the first place, the rise of wages leads to overwork among the workers. The more they want to earn the more they must sacrifice their time and freedom and work like slaves in the service of avarice. In doing so, they shorten their lives. But this is all to the good of the working class as a whole, since it creates a renewed demand. This class must always sacrifice a part of itself if it is to avoid total destruction.

Furthermore, when is a society in a condition of increasing prosperity? When the capitals and revenues of a country are growing. But this is only possible

(a) as a result of the accumulation of a large quantity of labor, for capital is accumulated labor; that is to say, when more and more of the workers' products are being taken from him, when his own labor increasingly confronts him as alien property and the means of his existence and of his activity are increasingly concentrated in the hands of the capitalist.

(b) The accumulation of capital increases the division of labor, and the division of labor increases the number of workers; conversely, the growth in the number of workers increases the division of labor, just as the growth in the division of labor increases the accumulation of capital. As a consequence of this division of labor, on the one hand, and the accumulation of capitals, on the other, the worker becomes more and more uniformly dependent on labor, and on a particular, very one-sided and machine-like type of labor. Just as he is depressed, therefore, both intellectually and physically to the level of a machine, and from being a man becomes an abstract activity and a stomach, so he also becomes more and more dependent on every fluctuation in the market price, in the investment of capital and in the whims of the wealthy. Equally, the increase in that class of men who do nothing but work increases the competition among the workers and therefore lowers their price. In the factory system, conditions such as these reach their climax.

(c) In a society which is becoming increasingly prosperous, only the very richest can continue to live from the interest on money. All the rest must run a business with their capital, or put it on the market. As a result, the competition among the capitalists increases, there is a growing concentration of capital, the big capitalists ruin the small ones, and a section of the former capitalists sinks into the class of the workers -- which, because of this increase in numbers, suffers a further depression of wages and becomes even more dependent on the handful of big capitalists. Because the number of capitalists has fallen, competition for workers has increased, the competition among them has become all the more considerable, unnatural and violent. Hence, a section of the working class is reduced to beggary or starvation with the same necessity as a section of the middle capitalists ends up in the working class.

So, even in the state of society most favorable to him, the inevitable consequence for the worker and early death, reduction to a machine, enslavement to capital which piles up in threatening opposition to him, fresh competition and starvation or beggary for a section of the workers.

An increase in wages arouses in the worker the same desire to get rich as in the capitalist, but he can only satisfy this desire by sacrificing his mind and body. An increase in wages presupposes, and brings about, the accumulation of capital, and thus opposes the product of labor to the worker as something increasingly alien to him. Similarly, the division of labor makes him more and more one-sided and dependent, introducing competition from machines as well as from men. Since the worker has been reduced to a machine, the machine can confront him as a competitor. Finally, just as the accumulation of capital increases the quantity of industry and, therefore, the number of workers, so it enables the same quantity of industry to produce a greater quantity of products. This leads to overproduction and ends up either by putting a large number of workers out of work or by reducing their wages to a pittance.

Such are the consequences of a condition of society which is most favorable to the worker -- i.e., a condition of growing wealth.

But, in the long run, the time will come when this state of growth reaches a peak. What is the situation of the worker then?

(3) "In a country which had acquired that full complement of riches... both the wages of labor and the profits of stock would probably be very low... the competition for employment would necessarily be so great as to reduce the wages of labor to what was barely sufficient to keep up the number of laborers, and, the country being already fully peopled, that number could never be augmented." [Smith I, p. 84]

The surplus population would have to die.

So, in a declining state of society, we have the increasing misery of the worker; in an advancing state, complicated misery; and in the terminal state, static misery.

Smith tells us that a society of which the greater part suffers is not happy. [Smith I, p. 70] But, since even the most prosperous state of society leads to suffering for the majority, and since the economic system [Nationalokonomie], which is a society based on private interests, brings about such a state of prosperity, it follows that society's distress is the goal of the economic system.

We should further note in connection with the relationship between worker and capitalist that the latter is more than compensated for wage rises by a reduction in the amount of labor time, and that wage rises and increases in the interest on capital act on commodity prices like simple and compound interest respectively.

Let us now look at things from the point of view of the political economist and compare what he has to say about the theoretical and practical claims of the worker.

He tells us that, originally, and in theory, the whole produce of labor belongs to the worker. [Smith I, p. 57] But, at the same time, he tells us that what the worker actually receives is the smallest part of the product, the absolute minimum necessary; just enough for him to exist not as a human being but as a worker and for him to propagate not humanity but the slave class of the workers.

The political economist tells us that everything is bought with labor and that capital is nothing but accumulated labor, but then goes on to say that the worker, far from being in a position to buy everything, must sell himself and his humanity.

While the ground rent of the indolent landowner generally amounts to a third of the product of the soil, and the profit of the busy capitalist to as much as twice the rate of interest, the surplus which the worker earns amounts at best to the equivalent of death through starvation for two of his four children. [Smith I, p. 60]]

According to the political economist, labor is the only means whereby man can enhance the value of natural products, and labor is the active property of man. But, according to this same political economy, the landowner and the capitalist, who as such are merely privileged and idle gods, are everywhere superior to the worker and dictate the law to him.

According to the political economist, labor is the only constant price of things. But nothing is more subject to chance than the price of labor, nothing exposed to greater fluctuations.

While the division of labor increases to the productive power of labor and the wealth and refinement of society, it impoverishes the worker and reduces him to a machine. While labor gives rise to the accumulation of capital, and so brings about the growing prosperity of society, it makes the worker increasingly dependent on the capitalist, exposes him to greater competition and drives him into the frenzied world of overproduction, with its subsequent slump.

According to the political economist, the interest of the worker is never opposed to the interest of society. But, society is invariably and inevitably opposed to the interest of the worker.

According to the political economist, the interest of the worker is never opposed to that of society: (1) because the rise in wages is more than made up for by the reduction in the amount of labor time, with the other consequences explained above, and (2) because in relation to society the entire gross product is net product, and only in relation to the individual does the net product have any significance.

But it follows from the analyses made by the political economists, even though they themselves are unaware of the fact, that labor itself -- not only under present conditions, but in general, insofar as its goal is restricted to the increase of wealth --is harmful and destructive.

*
In theory, ground rent and profit on capital are deductions made from wages. But, in reality, wages are a deduction which land and capital grant the worker, an allowance made from the product of labor to the worker, to labor.

The worker suffers most when society is in a state of decline. He owes the particular severity of his distress to his position as a worker, but the distress as such is a result of the situation of society.

But, when society is in a state of progress, the decline and impoverishment of the worker is the product of his labor and the wealth produced by him. This misery, therefore, proceeds from the very essence of present-day labor.

A society at the peak of prosperity -- an ideal, but one which is substantially achieved, and which is at least the goal of the economic system and of civil society -- is static misery for the worker.

It goes without saying that political economy regards the proletarian -- i.e., he who lives without capital and ground rent, from labor alone, and from one-sided, abstract labor at that -- as nothing more than a worker. It can, therefore, advance the thesis that, like a horse, he must receive enough to enable him to work. It does not consider him, during the time when he is not working, as a human being. It leaves this to criminal law, doctors, religion, statistical tables, politics, and the beadle.

Let us now rise above the level of political economy and examine the ideas developed above, taken almost word for word from the political economists, for the answers to these two questions:

(1) What is the meaning, in the development of mankind, of this reduction of the greater part of mankind to abstract labor?

(2) What mistakes are made by the piecemeal reformers, who either want to raise wages and thereby improve the situation of the working class, or -- like Proudhon -- see equality of wages as the goal of social revolution?

In political economy, labor appears only in the form of wage-earning activity.