Socialist Viewpoint

Effect of Capitalist Competition on the Capitalist Class, the Middle Class, and the Working Class

We thus see how the method of production and the means of production are constantly enlarged, revolutionized, how division of labor necessarily draws after it greater division of labor, the employment of machinery greater employment of machinery, work upon a large scale work upon a still greater scale. This is the law that continually throws capitalist production out of its old ruts and compels capital to strain ever more the productive forces of labor for the very reason that it has already strained them—the law that grants it no respite, and constantly shouts in its ear: March! March! This is no other law than that which, within the periodical fluctuations of commerce, necessarily adjusts the price of a commodity to its cost of production.

No matter how powerful the means of production which a capitalist may bring into the field, competition will make their adoption general; and from the moment that they have been generally adopted, the sole result of the greater productiveness of his capital will be that he must furnish at the same price, 10, 20, 100 times as much as before. But since he must find a market for, perhaps, 1,000 times as much, in order to outweigh the lower selling price by the greater quantity of the sale; since now a more extensive sale is necessary not only to gain a greater profit, but also in order to replace the cost of production (the instrument of production itself grows always more costly, as we have seen), and since this more extensive sale has become a question of life and death not only for him, but also for his rivals, the old struggle must begin again, and it is all the more violent the more powerful the means of production already invented are. The division of labor and the application of machinery will therefore take a fresh start, and upon an even greater scale.

Whatever be the power of the means of production which are employed, competition seeks to rob capital of the golden fruits of this power by reducing the price of commodities to the cost of production; in the same measure in which production is cheapened—i.e., in the same measure in which more can be produced with the same amount of labor—it compels by a law which is irresistible a still greater cheapening of production, the sale of ever greater masses of product for smaller prices. Thus the capitalist will have gained nothing more by his efforts than the obligation to furnish a greater product in the same labor-time; in a word, more difficult conditions for the profitable employment of his capital. While competition, therefore, constantly pursues him with its law of the cost of production and turns against himself every weapon that he forges against his rivals, the capitalist continually seeks to get the best of competition by restlessly introducing further subdivision of labor and new machines, which, though more expensive, enable him to produce more cheaply, instead of waiting until the new machines shall have been rendered obsolete by competition.

If we now conceive this feverish agitation as it operates in the market of the whole world, we shall be in a position to comprehend how the growth, accumulation, and concentration of capital bring in their train an ever more detailed subdivision of labor, an ever greater improvement of old machines, and a constant application of new machines—a process which goes on uninterruptedly, with feverish haste, and upon an ever more gigantic scale.

But what effect do these conditions, which are inseparable from the growth of productive capital, have upon the determination of wages?

The greater division of labor enables one laborer to accomplish the work of five, 10, or 20 laborers; it therefore increases competition among the laborers fivefold, tenfold, or twentyfold. The laborers compete not only by selling themselves one cheaper than the other, but also by one doing the work of five, 10, or 20; and they are forced to compete in this manner by the division of labor, which is introduced and steadily improved by capital.

Furthermore, to the same degree in which the division of labor increases, is the labor simplified. The special skill of the laborer becomes worthless. He becomes transformed into a simple monotonous force of production, with neither physical nor mental elasticity. His work becomes accessible to all; therefore competitors press upon him from all sides. Moreover, it must be remembered that the more simple, the more easily learned the work is, so much the less is its cost of production, the expense of its acquisition, and so much the lower must the wages sink—for, like the price of any other commodity, they are determined by the cost of production. Therefore, in the same manner in which labor becomes more unsatisfactory, more repulsive, so does competition increase and wages decrease.

The laborer seeks to maintain the total of his wages for a given time by performing more labor, either by working a great number of hours, or by accomplishing more in the same number of hours. Thus, urged on by want, he himself multiplies the disastrous effects of division of labor. The result is: the more he works, the less wages he receives. And for this simple reason: the more he works, the more he competes against his fellow workmen, the more he compels them to compete against him, and to offer themselves on the same wretched conditions as he does; so that, in the last analysis, he competes against himself as a member of the working class.

Machinery produces the same effects, but upon a much larger scale. It supplants skilled laborers by unskilled, men by women, adults by children; where newly introduced, it throws workers upon the streets in great masses; and as it becomes more highly developed and more productive it discards them in additional though smaller numbers. We have hastily sketched in broad outlines the industrial war of capitalists among themselves. This war has the peculiarity that the battles in it are won less by recruiting than by discharging the army of workers. The generals (the capitalists) vie with one another as to who can discharge the greatest number of industrial soldiers.

The economists tell us, to be sure, that those laborers who have been rendered superfluous by machinery find new venues of employment. They dare not assert directly that the same laborers that have been discharged find situations in new branches of labor. Facts cry out too loudly against this lie. Strictly speaking, they only maintain that new means of employment will be found for other sections of the working class; for example, for that portion of the young generation of laborers who were about to enter upon that branch of industry which had just been abolished. Of course, this is a great consolation to the disinherited laborers. There will be no lack of fresh exploitable blood and muscle for the Messrs. Capitalists—the dead may bury their dead. This consolation seems to be intended more for the comfort of the capitalists themselves than their laborers. If the whole class of the wage-laborer were to be annihilated by machinery, how terrible that would be for capital, which, without wage-labor, ceases to be capital!

But even if we assume that all who are directly forced out of employment by machinery, as well as all of the rising generation who were waiting for a chance of employment in the same branch of industry, do actually find some new employment—are we to believe that this new employment will pay as high wages as did the one they have lost? If it did, it would be in contradiction to the laws of political economy. We have seen how modern industry always tends to the substitution of the simpler and more subordinate employments for the higher and more complex ones. How, then, could a mass of workers thrown out of one branch of industry by machinery find refuge in another branch, unless they were to be paid more poorly?

An exception to the law has been adduced, namely, the workers who are employed in the manufacture of machinery itself. As soon as there is in industry a greater demand for and a greater consumption of machinery, it is said that the number of machines must necessarily increase; consequently, also, the manufacture of machines; consequently, also, the employment of workers in machine manufacture;—and the workers employed in this branch of industry are skilled, even educated, workers.

Since the year 1840 this assertion, which even before that date was only half-true, has lost all semblance of truth; for the most diverse machines are now applied to the manufacture of the machines themselves on quite as extensive a scale as in the manufacture of cotton yarn, and the laborers employed in machine factories can but play the role of very stupid machines alongside of the highly ingenious machines.

But in place of the man who has been dismissed by the machine, the factory may employ, perhaps, three children and one woman! And must not the wages of the man have previously sufficed for the three children and one woman? Must not the minimum wages have sufficed for the preservation and propagation of the race? What, then, do these beloved bourgeois phrases prove? Nothing more than that now four times as many workers’ lives are used up as there were previously, in order to obtain the livelihood of one working family.

To sum up: the more productive capital grows, the more it expands the division of labor and the application of machinery; the more the division of labor and the application of machinery expand, the more does competition expand among the workers, the more do their wages contract.

In addition, the working class is also recruited from the higher strata of society; a mass of small business men and of people living upon the interest of their capital is precipitated into the ranks of the working class, and they will have nothing else to do than to stretch out their arms alongside of the arms of the workers. Thus the forest of outstretched arms, begging for work, grows ever thicker, while the arms themselves grow ever leaner.

It is evident that the small manufacturer cannot survive in a struggle in which the first condition of success is production upon an ever greater scale.

The interest on capital decreases in the same measure as the mass and number of capitals increase. Therefore, the smaller rentier (some one living on a fixed income) can no longer live on his interest but must throw himself into industry, and, consequently, help to swell the ranks of the small industrialists and thereby of candidates for the proletariat.

Finally, in the same measure in which the capitalists are compelled, by the movement described above, to exploit the already existing gigantic means of production on an ever-increasing scale, and for this purpose to set in motion all the mainsprings of credit, in the same measure do they increase the industrial earthquakes, in the midst of which the commercial world can preserve itself only by sacrificing a portion of its wealth, its products, and even its forces of production, to the gods of the nether world—in short, the crises increase. They become more frequent and more violent, if for no other reason, than for this alone, that in the same measure in which the mass of products grows, and thus the needs for extensive markets, in the same measure does the world market shrink ever more, and ever fewer markets remain to be exploited, since every previous crisis has subjected to the commerce of the world a hitherto unconquered but superficially exploited market.

But capital not only lives upon labor. Like a master, at once distinguished and barbarous, it drags with it into its grave the corpses of its slaves, whole hecatombs of workers, who perish in the crises.

We thus see that if capital grows rapidly, competition among the workers grows with even greater rapidity—i.e., the means of employment and subsistence for the working class decrease in proportion even more rapidly; but, this notwithstanding, the rapid growth of capital is the most favorable condition for wage-labor.

¹53 Neue Rheinische Zeitung (New Rhenish Gazette): Appeared in Cologne from June 1, 1848 to May 19, 1849. Karl Marx was its editor-in-chief. —Ed.

²53 Marx says in Capital: “…by classical Political Economy, I understand that economy which, since the time of W. Petty, has investigated the real relations of production in bourgeois society…” (Vol. I, Moscow 1954, p.81)

The most important representatives of classical political economy in England were Adam Smith and David Ricardo—Ed.

³⁵³ “Although it first took shape in the minds of a few men of genius towards the end of the seventeenth century, political economy in the narrow sense, in its positive formulation by the physiocrats and Adam Smith, is nevertheless essentially a child of the eighteenth century…” (F. Engels, Anti-Duhring, Moscow 1954, p. 209.)—Ed.

53⁴ This refers to the Revolution of February 23-24, 1848 in Paris, of March 13 in Vienna, and March 18 in Berlin.—Ed.