The Main Argument of Marx’s Wage Labour and Capital
Most criticism of capitalism focuses on how the system is rigged. Bernie’s entire campaign is built upon this argument. This argument is true and powerful, but in Wage Labour and Capital Marx makes a more nuanced, more powerful critique of capitalism, by accepting many premises of the capitalists, and using them against them. Even if we assume that the system is not rigged, and the capitalists have nothing but good intentions, creating jobs and distributing wealth to the workers, the capitalists are still oppressing the workers.
In ancient and feudal social relationships, slaves and serfs were essentially owned by their lords, dependent upon them for their livelihood. Capitalism created a significantly different social relationship between the classes. Capitalism created two new interdependent classes: the business owners (a.k.a. “capitalists”) and the workers. In a capitalist society there may be other classes, but these are the two classes that define capitalism. The worker works for the capitalist in exchange for wages. The capitalist risks his or her capital, paying wages to the workers, hoping this exchange will result in making a profit.
Under capitalism the workers are free to work for any capitalist they wish. This free will choice distinguishes the working class from slaves and serfs. When viewed from this perspective, capitalism appears to be a vast improvement over previous periods of human history. Perhaps this perspective is entirely warranted. But in Wage Labour and Capital Marx points out that this perspective hides important facts.
In capitalism commodities are exchanged on a free market. The market fluctuates according to supply and demand. The price of a commodity goes up as demand increases, or supply decreases, or both. Capitalism treats labor power, the physical or mental energy that workers put into production, as a commodity, a commodity most often measured by the clock, though not exclusively. Marx calls this commodity “labor power.” As demand for labor power increases, the worker’s pay, on the whole, increases. As the supply of labor power decreases, the worker’s wages increases.
But labor power is not like other commodities. Labor power is the life activity of an entire class of people. Workers may have a free will choice to decide who they will sell their labor power to, but rarely do they have a choice to decide whether or not they will sell their labor power. They must sell their labor power in order to live.
There is an inherent inequality in the exchange of wages for labor power. If the capitalist cannot purchase labor power, he cannot make a profit. If the workers cannot sell their labor power in exchange for wages, they (or their family) perish. The workers must work in order to stay alive. (Of course there are exceptions, especially if one starts their own business, but it is important to remember that one of Marx’s central arguments is that most workers do not have alternative options available to them. His focus is on the majority, not the exceptions. Under capitalism, one cannot imagine a scenario in which the entire working class find alternative means of subsistence.)
To make things worse, the capitalists benefit from the workers competing against each other. Since workers sell their labor power on a free market, the workers necessarily compete against each other. The purchaser of the labor power, the capitalists, seek the best price or the best quality of labor power. Consequently, the individual worker ends up competing against himself or herself. By taking a job at a lower wage than another worker, eventually the median wage of the entire market is lowered.
Not only does the capitalist pit workers against each other, since the capitalists are always competing against each other to sell (and consequently produce) commodities at a lower price, they must find ways to produce commodities ever more efficiently. This leads them to find process improvements and new technologies that reduce labor costs. As the industry introduces automation, the demand for labor is reduced, reducing the workers’ wages.
Marx argues that the creation of new markets do not sufficiently replace the former jobs. I think Marx is right, but Marx wrote this essay in the Nineteenth century. In the Twentieth century wages for workers increased. Reconciling these two things is outside of the scope of my summary, but it is an important topic for modern readers of Marx to resolve.
Either way, an important claim Marx makes is that the capitalists depend on labor power in order to make a profit. In the short term they may introduce automation in order to compete on the market, but efficiencies in production eventually become the standard, lowering the cost at which commodities can be sold. On the whole, the capitalist class cannot make a profit from automation. They only make a profit when they purchase labor power in exchange for wages.
Consequently, the workers can use this fact to their advantage. By uniting with their fellow workers, agreeing to withhold their labor, the workers can gain power. By going on strike, or merely threatening to go on strike sometimes, the workers can demand higher wages, better working conditions, and most importantly, democratic control over their workplace.
One last thing: the small business owners play an important role in all of this. They are capitalists, but they are capitalists with very little power. They have power over their employees, but due to the economy of scale, capitalists with much more capital can easily produce commodities at a cheaper price, under selling them. Amazon undersells local businesses regularly, not to mention Amazon’s access to the biggest data set in human history, providing them insights about emerging markets and other opportunities. Small business owners are often a part of the 99%, although they usually align their interests with the 1%. A workers’ movement must strategically account for the allegiances of the small business owners.