Socialist Viewpoint

Relation of Wage-Labor to Capital

What is it that takes place in the exchange between the capitalist and the wage-labor?

The laborer receives means of subsistence in exchange for his labor-power; the capitalist receives, in exchange for his means of subsistence, labor, the productive activity of the laborer, the creative force by which the worker not only replaces what he consumes, but also gives to the accumulated labor a greater value than it previously possessed. The laborer 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 labor new values in place of the values lost in consumption. But it is just this noble reproductive power that the laborer 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 laborer 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 laborer, he has doubled it. Therefore, he has consumed the one shilling that he gave to the day laborer in a fruitful, productive manner. For the one shilling he has bought the labor-power of the day-laborer, which creates products of the soil of twice the value, and out of one shilling makes two. The day-laborer, 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 labor-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-labor; wage-labor 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 labor-power, by calling wage-labor into life. The labor-power of the wage-laborer 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 laborer 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 labor-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 laborer.

But what is growth of productive capital? Growth of the power of accumulated labor over living labor; growth of the rule of the bourgeoisie over the working class. When wage-labor produces the alien wealth dominating it, the power hostile to it, capital, there flows 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-labor 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-laborer remains a wage-laborer, 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-labor 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 labor grows. It therefore increases the price of labor-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 laborer 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 labor-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 labor-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 labor-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 labor-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, even though their money value has not changed.

The money price of labor-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 labor-power, the nominal wages, but also the real wages.

But neither the nominal wages—i.e., the amount of money for which the laborer 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 labor-power in relation to the price of commodities; relative wages, on the other hand, express the share of immediate labor in the value newly created by it, in relation to the share of it which falls to accumulated labor, to capital.

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