Wage Decline under Capital: Wage-Labor and Capital, pt. 3

This is the last post of a three-part series on Marx’s “Wage-Labor and Capital,” chapters 7-9. For other parts in the series go to the series page. This post covers how capital deleteriously affects all classes with producing a declining wage.

What Determines the Rise and Fall of Wages and Profit?

Capitalists must replenish the wage with profit. Therefore, the price of their commodities must account for replenishing raw materials, the wear on tools, wages, and profits. As profits rise, Marx argues, wages fall, and vice-versa. I admit, I don’t fully understand this point of Marx, but I assume it reflects the relation of the two. This doesn’t mean that literally if one goes up, the other goes down; it is relative. E.g., if the profits of capitalists go up, wages can go up also, but not at all in the same ratio.

If profits increase disproportionately to wages, the profits as a fraction take up more of the pie than wages. Let’s say a capitalist gains a technological advantage over his competitor capitalists. He can then produce more for the same production cost, thereby gaining more profit than his competitors. This helps consumers but not workers. Consumers get cheaper products- at the expense of workers.

Capital and Wage-labor Are Necessarily Opposed

Rapid increase of profit necessarily involves the rapid decrease of the power of the worker’s wage. The more a worker produces, the more crumbs he gets from the bigger pie of the capitalist, as just mentioned. At the same time, capital requires more workers to work capital. The workers are ever dependent on capital. While wages do increase as capital expands, it can’t possibly keep pace with the rate of capital profits.

Now, the existence of multiple capitalists increases competition between them. Wins come through selling a product cheaper, but gaining more of the market share as well as looking for more markets for the cheaper product. Productive power increases as more innovations impact technology and labor is divided into smaller, simpler tasks.

Effect of Capitalist Competition on All Classes

Capitalists seek to best their competition through further division of labor and new machines to offset the equalization of the playing field by all capitalists obtaining the same machinery. As labor divides and divides into smaller, simpler tasks, competition becomes fiercer between workers, and wages go lower. Why? Because the buyer (capitalist) has the advantage: there are more sellers (workers) than buyers. Good old supply and demand. The worker must do more in the same amount of time or work longer hours. However, the more the worker’s output, the less return on his relative wage.

Economists maintain that as one sector of labor recedes, a new sector will arise to replace it. However, Marx argues this applies to the class, not to each laborer in the class. E.g., the young have more of an advantage in acquiring new skills to be productive for a longer time (and at less pay) than their older counterparts. Marx even complains that the bigger productivity gained through technological innovation replaces the natural strength of men with a woman and three children. This wouldn’t be so bad if workers were in control of the means of production. Fact is, they aren’t.

Again, as more product is made, the more markets are needed to exploit. If the capitalist can’t exploit new markets, he can’t continue to make profit. Marx questions, however, what happens when there are no more markets to exploit. This is one of the contradictions of capitalism.

This is where Marx rather abruptly concludes the work. As technological innovation moves at a quicker pace, profits increase for the capitalists, and for a short period, to the workers.

Relation of Wage-Labor to Capital: Wage-Labor and Capital, Pt. 2

This is the second of three posts on Marx’s “Wage-Labor and Capital,” chapters 5-6. This post covers the nature of and relation of capital to wage-labor. You can find the rest of the series here.

The Nature and Growth of Capital

Marx defines capital as the extracted raw material, manufacture of labor instruments, and production of means of subsistence to create new raw materials, new labor instruments, new means of subsistence. An example of capital could be this: a rubber farm harvests rubber and sells it to a tire factory. The rubber farm would be an extraction of raw material, and the tire factory would be manufacturing new raw materials to sell to automobile companies.

Marx also calls capital “accumulated labor.” Production requires specific and reciprocal social relations. E.g., if there is no crude oil, there are no jobs to make cars, or refining plants to make gasoline, or truckers to transport it—and all the communities that form around these sectors become less tied, less communal. Marx contends that social relations vary and alter according to the means of production. Each epoch of the means of production becomes discrete: ancient, feudal, capitalist.

Capitalism is a bourgeois social relation. It operates under the assumption of exploiting a class that can only work, but without possession of property. Elsewhere, Marx equates property with capital. E.g., the worker doesn’t control the property that manufactures iPhones, the property from which they extract rare minerals, the seed patent property of Monsanto, the utility property that heats and cools their homes, water treatment property, or the property of bus and train systems. In the end, capital is living labor serving accumulated labor: preserving and multiplying it; it does not serve the living, except the bourgeois.

Relation of Wage-labor to Capital

In the relation between wage-labor and capital, the former gains subsistence, though this subsistence is consumed immediately for life. The latter receives even more value added to accumulated labor. Marx uses the example of the day laborer getting paid $1 a day, even though he produced $2 of product. This extra $1 of value he produced goes to the capitalist, $1 of value he didn’t work for. Multiply this by 5 workers, 20 workers, 100 workers, 1000 workers. This is that much money the capitalist gains for all the work produced by the laborer(s), again that he didn’t work for.

An increase in capital requires an increase in workers, because it requires that much more labor to increase it. As it grows, living labor more and more serves accumulated labor, both of the accumulated labor of their own making and that which past workers have produced. The capital remains long after workers are dead. Consider the Rockefeller family. The Rockefeller progeny still lives off of the formerly exploited labor of 19^th-century workers, while continuing to add more to that accumulation through exploitation of 20^th- and 21^st-century laborers. Workers perish without work; capital perishes without exploitation.

Labor and Commodities: Wage-Labor and Capital, Pt. 1

This post is the first in a 3-part series on Marx’s “Wage-Labor and Capital.” Part 1 covers chapters 2-4, part 2 chs. 5-6, and part 3 chs. 7-9 (the first chapter is an unnecessary introduction). The main idea of the work is that capitalists obtain all their advantages by exploiting the labor of workers. You can find the rest of the series here.

What Are Wages?

Workers typically define wages as what a capitalist pays a worker for hours of work or a completed project. Marx contends, however, that the worker actually sells his labor-power—a commodity—to the capitalist.

Prices are the exchange rate of a commodity in money terms. Wages aren’t a share in the product produced, but are commodities themselves, given to workers in order to live. Work is not the worker’s life; his life begins when his work ends.

How Do Commodities Get Their Price?

Prices obtain their exchange rate from the competition between buyer and seller. Competition between sellers drives price down; competition between buyers drives price up. In this case, the capitalists are the buyers and the workers are the sellers. Since workers far outnumber the capitalists, the capitalist, in addition to owning the means of production, has an enormous advantage in buying whatever worker he desires.

The cost of production factors in to the seller’s profit. When price goes below the cost of production, capital withdraws its investment. What is the cost of production? It includes labor time, raw materials, and machine maintenance.

How Are Wages Determined?

The laws of commodities apply to wages. Labor costs the capitalist the amount of money required to train the worker, keep him alive, and literally reproduce the worker through sexual reproduction. Shorter training periods save the capitalist money, because then he has to pay less for non-production. According to Marx, however, this “minimum wage,” refers not to the individual worker, but to the class of workers.

“Communism Leads to Abolition of Private Property” Plus 5 More Objections to Communism: Communist Manifesto, part 3

Steve Jobs and FoxConn Worker- in objections to communism post

Capitalists have had a problem with communism since its inception. In the second part of The Communist Manifesto (third part in my series; other parts here), the authors described how communists related to the proletariat. Communists connected similarities between the European workers’ parties that went beyond national identity (e.g., workers have the same relation to capitalists in England as they do in Poland). Marx and Engels responded to six (technically seven) objections that the bourgeois brought against the communists, and to that we turn. As before, I will try to update some of their language to the present. E.g., I’ll render “bourgeoisie” as “owners,” or “capitalists,” or the “proletariat” as “working class” or “workers.”

The 6 Objections Owners Had with Communism

Communists deny the worker the fruit of his labor
Communists destroy individuality
Those dern communists do away with property
Commies dismantle the family and disrupt family education
Communists desire to share women in common
Communists dissolve nationalities/countries

The main structure of these objections lies in stating a bourgeois objection, explaining how the bourgeoisie critiques communists according to naturalized categories, and then asserting that what the bourgeois consider as neutral categories (e.g., “the” family, “the” individual, “freedom,” etc.) are actually nuanced by class.

Objections #1: Communists Deny the Worker the Fruit of His Labor

Capitalists, according to Marx and Engels, claimed that communists sought to deny the worker what he had made through his labor: the fruit or product. Workers had this relation to their labor before capitalism. E.g., under feudalism, peasants had to render tribute from their crops, but lords did not own all crops and then sell it back to peasants. This property relation comes under capitalism.

Under the “wage-labor” system of capitalism, a worker receives compensation not in what he produces, but with a wage far below the value he produces. It cost Apple $236 to produce the iPhone 6s Plus, though it sold for $749. In 24 hour cycles, 200K workers were building 540K iPhones daily. At that rate, each worker was producing 2.7 iPhone 6s Pluses per day, which would net Apple $1385.10 ((749-236)*2.7).

You and I both know that most top managers weren’t even making a quarter of $1300 per day. Let’s say the worker is well compensated at $25 an hour. Working 8 hours a day, 5 days a week, the same worker who produced 2.7 iPhones per day could not afford to buy the phone outright without almost 4 days’ pay. Admittedly, most people buy on installment plans, helping communications capitalists, but the point stands.

The communists, according to Marx and Engels, wanted to do away with “private property” and move it to worker ownership. In this way of things, the workers (not the shareholders) would own the means of production AND what they produced, drastically altering the relation between persons and capital. By abolishing private property, the authors do not mean taking your iPhone, dog, and fleshlight. One, these would be products you produced yourself. Two, since production occurs for need instead of profit, a new relation develops between humans and commodities.

Objections #2: Communists Destroy Individuality

In the authors’ argument, this objection follows closely from the first. Capital is both the means of production and the product itself. For example, the machines used to assemble iPhones, along with iPhones themselves, are capital that belong to the capitalist class.

What the authors get at is that capitalists mistake their class’s view of individuality with individuality itself (cf. my post on naturalization).

Even if it was a capitalist who originated the idea for the iPhone, the capitalist cannot possibly realize this dream without a mass of labor. However, he attains a social status for the idea/product while the workers remain in the background.

When you think of the Apple brand, who do you picture? Do you think of the thousands of workers involved in producing, transporting, stocking, and selling Apple products? Or do you think of Steve Jobs? This is the individuality communists seek to destroy—a self that is not possible without a largely exploited mass. The communists wish to re-inscribe their individuality.

Objections #3: Those Dern Communists Do Away with Property

Somewhat related to objection 1, owners claimed that communists wanted to abolish private property. Marx and Engels pled guilty. Capitalists equated property with productive property/the means of production. They “rented” this to workers in the form of a wage.

.Capitalists propagated the claim that if property ceased, then work would cease, and universal laziness would follow in this train. Our authors wryly put it,

“You are horrified at our intending to do away with private property. But in your existing society, private property is already done away with for nine-tenths of the population; its existence for the few is solely due to its non-existence in the hands of those nine-tenths” (25).

And guess what: the poor still worked in order to survive. They did not toil for their own needs, which might take roughly 4 hours a day to meet if they lived in a forest commune. No, they worked arbitrarily long hours to create enormous surpluses of products, the profits of which all went back to the capitalists.

Communists wanted, not to leech peoples’ property, but to prevent the already-occurring exploitation of the workers by the capitalists.

Objections 4: Commies Dismantle Family and Disrupt Family Education

This objection is a bit obtuse if you don’t know what’s going on in the background. The authors frame this as yet another case of the bourgeoisie mistaking its own concept of the family for the family itself.

Marx and Engels describe this bourgeois family as based “on capital, on private gain” in contrast with the “practical absence of the family among the proletariat.” I’m not sure what goes on here. Later they remark that they wish to end parental exploitation of their children. It remains unclear, however, if the authors mean bourgeois children, proletarian children, or children in general.

On r/Communism101, u/Ornlu_Wolfjarl claims that the communist aim to end the capitalist family was to remove inheritance rights, and therefore, the propagation of class. This makes sense, for at the end of this section, the authors call on banning all inheritance. U/laserbot claims something similar, in that commies were not about ending marriage or parent/child relations per se, but ending the reduction of women to baby factories and children to heirs.

It seems, too, that workers’ children were subject to child labor at this time. The authors state, “all family ties among the proletarians are torn asunder, and their children transformed into simple articles of commerce and instruments of labor” (27).

The communists wanted every child to have education, not just the owners.

Objections 5: Communists Desire to Share Women in Common

Marx and Engels charge the capitalists here with projecting again. The assumption seems to have been, according to our authors’ assertion, that women were property of their husbands. It makes sense, then, why capitalists would conclude that sharing property would include sharing women.

The authors desire women to self-actualize, to be more than reproductive vehicles, to be more than dependent upon men. Thus, in a communist world, proletarian women would not have to resort to prostitution, for class exploitation would have ceased.

What communists did wish to share was to share freedom with women. As Clara Zetkin would later state, “When a proletarian then exclaims: ‘My wife!’ he will add mentally, ‘Comrade of my ideals, companion of my battles, mother of my children for future battles.'”

Objections 6: Communists Dissolve Nationalities/Countries

Marx and Engels counter that the workers have no country to leave behind or betray. Since they have no private property and no stake in the state, the authors push for a “nationalism” that is internationalist. In their words, Marx and Engels declare, “Since the proletariat must first of all acquire political supremacy, must rise to be the leading class of the nation, must constitute itself the nation, it is, so far, itself national, though not in the bourgeois sense of the word” (28).

When the workers gain a foothold within their own states, it seems to follow that they would help workers in other states gain power there, too.

Next, however, they state something spurious, at least as history went on: “National differences and antagonisms between peoples are vanishing gradually day to day, owing to the development of the bourgeoisie…” This comment is definitely of its time. They were writing mainly about and to other Europeans, who shared semi-common cultures.

A Postlude of sorts

Though Marx would relegate religion to an echo of productive means, religion, as a cultural marker between groups, has served just as strong an identifier as nationality does now.

picture-of-Hatch's-the-democratization-of-american-christianity Admittedly, religion changes as the means of production change. Though not his aim, Nathan O. Hatch chronicles this change (in Christianity at least) in his The Democratization of American Christianity. He shows how religious practice shifted when monarchy shifted to democracy, a definite example of Marx’s theory that changes in the means of production drive history (here, on would say that the shift from feudalism to capitalism changed both politics and religion).

Perhaps, however, this criticism of Marx is premature. While they may have underestimated the power of nationalism (and ideas generally) in our time, Marx and Engels were prescient on group struggles. The ease with which politicians can scapegoat immigrants or unions or anything else for American problems demonstrates one thing. Workers largely have not realized that they are in common cause with workers of other countries. The owners of corporations, the ones who sent American jobs elsewhere, are not the friends of workers, American or not. Unions happened here to guard against the crap non-American workers now endure.

The next entry will be on Marx and Engels’ “10 Point Program.”