Value, Price and Profit · Marx’s address on Value, Price and Profit, ... most thorny of economic principles—Value, Price, ... But it was not until the end of 1864, after he and

Value, Price and ProfitADDRESSED TO WORKINGMEN

BYKARL MARX

EDITED BY HIS DAUGHTERELEANOR MARX AVELING

WITH INTRODUCTION AND ANNOTATIONS BYLUCIEN SANIAL

AND PREFACE BYDANIEL DE LEON

NEW YORK

NEW YORK LABOR NEWS COMPANYOnline Edition January 2006

http://www.slp.org/nyln.htm

Socialist Labor Party 2 www.slp.org

PREFACE.

At the death of Marx there was found among his pa-pers an almost forgotten address delivered by him at theSeptember, 1865, session of the General InternationalCongress. The manuscript, subsequently divided intochapters, is the subject of this booklet.

To make a scientific subject “easy” is usually to pro-mote shallowness. The process of “easy-making” carrieswith it much condensation and elimination of premises.The net result too often is to leave conclusions in the air,with the final consequences that the shallowness of theshallow is fed, and that which was meant for beginnersis of actual use only to the well advanced, who alone canprofit by synopses.

Marx’s address on Value, Price and Profit, though notintended to be an “easy-maker,” is not free from the dan-gers of condensations; but neither does it fall short oftheir usefulness.

Value, Price and Profit is the condensation of a por-tion of Capital. To say this is at once to utter a warn-ing—the warning of not accepting the address as a fullexposition of a subject that required the ponderous vol-ume of Capital to expound; and to utter admiration—theadmiration due to a unique and matchless performance.

Value, Price and Profit is a unique performance inthat it is vastly more than the synopsis of a great book,it is an introduction to the book—Capital. And it is anexceptional introduction. It has been well and wittilysaid that “prefaces” should be placed not at the begin-ning, but at the end of a work, where alone they can be

PR EFACE.


of real value, being only then aidful in illuming, bysummarizing. Value, Price and Profit belongs both at theend and at the beginning of Capital. Provided the begin-ner realize he is given only a general survey over a broadfield, he will, upon reading Value, Price and Profit,greedily take up Capital; and when through with Capi-tal, he will find Value, Price and Profit a commentary ofinestimable value in settling in his mind once for all themost thorny of economic principles—Value, Price, Profit,Unionism.

With this caution the precious booklet is unqualifiedlycommended to the studious

DANIEL DE LEONPleasantville, N.Y., October, 1912


INTRODUCTION.

It will be observed that in the “Preliminary” to thiswork Marx only makes a passing allusion to the circum-stances which prompted him to write it. As the work it-self was in form and purpose, though not in substance,an address to the General Council of the InternationalWorkingmen’s Association, those circumstances werewell understood by the men for whom it was then moreespecially intended, and there was no occasion for a de-tailed statement of its author’s motive and object. Not so,however, with most of its present readers; and as thecircumstances in question are not without some historicinterest and educational value, a more intelligible refer-ence to them will no doubt be deemed appropriate.

It was in 1862, at the London Universal Exhibition,that Karl Marx, availing himself of the friendly inter-course initiated there between the English and theFrench labor representatives, laid the corner-stone of theInternational Workingmen’s Association, which he hadalready conceived and attempted to establish in 1848.But it was not until the end of 1864, after he and his co-worker, Frederick Engels, had spent more than twoyears in extensive correspondence with prominent menin labor and revolutionary circles throughout Europe,that the association was finally constituted, with a Gen-eral Council sitting in London.

In order to give it life, however; in order to make it infact the great social revolutionary engine of which itsname was only thus far an obvious suggestion, it wasnecessary to bring together in an international congress

I NTR ODUCTI ON.


the representatives of its natural elements. In this wayalone could the indispensable uniformity of principlesand tactics be secured, and intelligent co-operation bepromoted between the organizations of different nation-alities.

It was, therefore, decided to hold such a congress inSeptember, 1865. Moreover, a list of the questions whichthe General Council proposed as a part of the order ofthe day was issued in all the European languages, sothat they could be debated in all the local sections al-ready formed in various countries, with a double view tothe mutual education of their members and the instruc-tion of the delegates by their respective constituencies.Thus and suddenly, for the first time in the history ofthe world, an intense interest was awakened among theproletarian masses of Europe, concerning those verymatters which alone had ever been of vital importance tothem, but from which their cunning masters had alwayscontrived to divert their attention.

For several reasons this great fact—immediate resultof the action taken by the General Council of the Inter-national under the guidance of Marx—deserves specialremembrance.

In the first place, too much stress cannot be laid upona development, then so absolutely new in the inferiorsocial strata, and so obviously pregnant with structuralchanges in the social organism. Here were the funda-mental layers of the working class, similar in all coun-tries, yet separated for centuries by race prejudices andlanguage differences far more effectually than by geo-graphical boundaries of any sort. Previously destitute, asit seemed, of independent motion, but ever ready for con-flict when “patriotically” electrified against each other by

I NTR ODUCTI ON.


their respective rulers, they now all at once presented asingular phenomenon, contrary to their “human nature”as until then inferred from their traditional behavior. Intheir midst, issued from their own inert substance, ap-peared certain stirring bodies, small as yet, but actingintellectually within and upon their surroundings thepart that the restless nucleus acts physically in the oth-erwise motionless cell; and simultaneously, as by a sortof magic, in direct violation of the divine command at theTower of Babel, all the languages and dialects in whichthe working classes of different countries had ever beentaught to deride, hate, and curse each other, became,through those small but active bodies, the propagatingmedia of working class solidarity, working class frater-nity, working class unity, and working class motionagainst all the fleecing and oppressing classes, local,provincial, national, and international. In other words,the very differences of speech which despotism had usedas a powerful dissolvent of class consciousness in theprocess of aggregating elements socially antagonisticinto political “patriotic” bodies, were now found a stillmore powerful dissolvent of patriotism, highly useful inthe process of class-conscious development.

In the second place, when it is considered that Marxnot only discovered the evolutionary power of Interna-tionalism, but devised the mode and machinery throughwhich this power could be applied with the utmost pos-sible effect in the environment of his time, his great fig-ure receives additional lustre from the light in which itis viewed. For it is then seen that he was not only theforemost economist of his time, and a profound philoso-pher as well, but also a practical statesman of matchlessability. The greater part of his life was, in fact, devoted

I NTR ODUCTI ON.


to political work of the highest complexity, along thoselines of the class struggle which he had been the firstinvestigator clearly to recognize and determine. Single-handed, as it were, he challenged upon those lines theorganized powers of despotism at a time when the “Reac-tion” had long been in undisputed control of Europeanaffairs. And he, a poor exile, with no resources but hispen, and no ministers but a few humble friends, suc-ceeded not only in resurrecting at that time the social-revolutionary movement, but in placing it for all time farabove the reach of its would-be smotherers.

For the performance of that gigantic work we havejust seen that he had first to construct a special instru-ment, namely, the International Workingmen’s Associa-tion. He had to construct it with such “intellectual mate-rials,” so to speak, as were immediately available, andthen to watch its every motion; for any appreciable de-viation from scientific principles and correct tacticsmight have seriously compromised the great end in view.From the very beginning he had, therefore, to overcomedifficulties that called for the exercise of qualities rarelyfound combined in the most successful statesman; aBismarck, for instance, achieving his purpose by un-scrupulous means, whereas honesty was the very fun-dament of Marx’s conduct and policy, as behooved anapostle of truth.

The first obstacle he met consisted in the scarcity ofmen mentally equipped for the building up of an organi-zation that contemplated the triumph of science overforce, of reason over brutality. Those were, indeed, daysof intellectual darkness and confusion in economics, evenamong the students of social science. In France, and inthe neighboring countries mentally influenced by her to

I NTR ODUCTI ON.


a more or less extent, the Utopian schools of St. Simonand Fourier, once very active, had fallen into somnolenceand “reverie,” while the revolutionary-sounding but in-tensely bourgeois sophisms of the Anarchist Proudhonhad caught the ears of many workingmen. In Englandnothing remained of the Chartist agitation, which hadfor a time been promiseful of a great labor movementalong the lines—the only safe lines—of class-consciousness; and the British trade-unions, apparentlyresigned to the wage-system as a finality, were more andmore adapting themselves to capitalism by accepting itseconomic tenets, and consequently assuming the formnow known in this country as “Pure-and-Simpledom.” InGermany alone, owing to the brilliant propagation byFerdinand Lassalle of such parts of the doctrine of Marxas had already been published in his earlier works, therewas a beginning of sound organization.

Of sympathizers who sufficiently understood him tobe fully trusted in active co-operation the number was,therefore, very small. And it may be added that the co-operation of those who, knowing little, did not under-stand him, or, knowing wrongly, misunderstood him,was more dangerous than useful, as appears plainlyfrom the case here under special consideration. London,as the seat of the General Council of the International,was naturally one of the chief centers of the general eco-nomic discussions preparatory to the Congress, and itwas there, in the presence of the Council, that the Eng-lish delegate, Weston, mentioned by Marx in his “Pre-liminary,” read a paper embodying his crude views anderroneous notions. At the same time the French Proud-honians were energetically propagating their own tenetsin Paris and other great cities. Marx immediately real-

I NTR ODUCTI ON.


ized the extent of the danger threatened by the economicignorance of those very leaders to whom the workingclass was confidingly looking for education and guidance,and he wrote, in the form of an address to the GeneralCouncil, the paper which is here published under thetitle, Value, Price and Profit. It was publicly read by theCouncil at the Congress, and the light it cast in theminds of unprejudiced delegates saved the movementfrom that premature collapse or instant paralysis whichwould inevitably have followed an irreducible disagree-ment on fundamental principles.

Under the circumstances which have just been re-lated, Marx must of necessity have written this work ingreat haste; still, it is universally considered as the bestepitome we have of the first volume of his Capital, and,as such, is invaluable to the beginner in economics. Itplaces him squarely on his feet at the threshold of hisinquiry; that is, in a position where his perceptive facul-ties cannot be deceived and his reasoning power conse-quently vitiated by the very use of his eyesight; whereas,by the very nature of his capitalist surroundings, he nowstands on his head, and sees all things inverted.

Having with this paper accomplished his immediateobject, Marx did not undertake to publish it, obviouslybecause the great economic laws therein presented inpopular form were soon to be expounded far more com-pletely and scientifically in the crowning work of his life.But he preserved it as a historic memento. His gifteddaughter, Eleanor Marx Aveling, found it among his pa-pers after the death of Frederick Engels. She then editedit, and a London firm published the English edition of it,which has heretofore been sold in this country. In thatedition, however, we found some errors; very few, we

I NTR ODUCTI ON.


must say in justice to editor and publisher, yet quite im-portant in some cases, where Marx is inadvertentlymade to say the very contrary of his meaning, as amplyshown by the context. As the demand for this work issteadily growing in the United States, the Socialist La-bor Party, through its own “Labor News” agency, hasthought it eminently proper to issue the present Ameri-can edition, free from all blemishes.

LUCIEN SANIAL.New York, January, 1901.


Value, Price and Profit.

PRELIMINARY.

CITIZENS:Before entering into the subject-matter, allow me to

make a few preliminary remarks.There reigns now on the Continent a real epidemic of

strikes, and a general clamor for a rise of wages. Thequestion will turn up at our Congress. You, as the headof the International Association, ought to have settledconvictions upon this paramount question. For my ownpart, I considered it therefore my duty to enter fully intothe matter, even at the peril of putting your patience toa severe test.

Another preliminary remark I have to make in regardto Citizen Weston. He has not only proposed to you, buthas publicly defended, in the interests of the workingclass, as he thinks, opinions he knows to be most un-popular with the working class. Such an exhibition ofmoral courage all of us must highly honor. I hope that,despite the unvarnished style of my paper, at its conclu-sion he will find me agreeing with what appears to methe just idea lying at the bottom of his theses, which,however, in their present form, I cannot but considertheoretically false and practically dangerous.

I shall now at once proceed to the business before us.


CHAPTER I.

PRODUCTION AND WAGES.

Citizen Weston’s argument rested, in fact, upon twopremises: firstly, that the amount of national productionis a fixed thing, a constant quantity or magnitude, as themathematicians would say; secondly, that the amount ofreal wages, that is to say, of wages as measured by thequantity of the commodities they can buy, is a fixedamount, a constant magnitude.

Now, his first assertion is evidently erroneous. Yearafter year you will find that the value and mass of pro-duction increase, that the productive powers of the na-tional labor increase, and that the amount of money nec-essary to circulate this increasing production continu-ously changes. What is true at the end of the year, andfor different years compared with each other, is true forevery average day of the year. The amount or magnitudeof national production changes continuously. It is not aconstant but a variable magnitude, and apart fromchanges in population it must be so, because of the con-tinuous change in the accumulation of capital and theproductive powers of labor. It is perfectly true that if arise in the general rate of wages should take place to-day,that rise, whatever its ulterior effects might be, would,by itself, not immediately change the amount of produc-tion. It would, in the first instance, proceed from the ex-isting state of things. But if before the rise of wages thenational production was variable, and not fixed, it willcontinue to be variable and not fixed after the rise ofwages.

PR ODUCTI ON AND WAGES.


But suppose the amount of national production to beconstant instead of variable. Even then, what our friendWeston considers a logical conclusion would still remaina gratuitous assertion. If I have a given number, sayeight, the absolute limits of this number do not preventits parts from changing their relative limits. If profitswere six and wages two, wages might increase to six andprofits decrease to two, and still the total amount remaineight. Thus the fixed amount of production would by nomeans prove the fixed amount of wages. How then doesour friend Weston prove this fixity? By asserting it.

But even conceding him his assertion, it would cutboth ways, while he presses it only in one direction. Ifthe amount of wages is a constant magnitude, then itcan be neither increased nor diminished. If then, in en-forcing a temporary rise of wages, the workingmen actfoolishly, the capitalists, in enforcing a temporary fall ofwages, would act not less foolishly. Our friend Westondoes not deny that, under certain circumstances, theworkingmen can enforce a rise of wages, but theiramount being naturally fixed, there must follow a reac-tion. On the other hand, he knows also that the capital-ists can enforce a fall of wages, and, indeed, continuouslytry to enforce it. According to the principle of the con-stancy of wages, a reaction ought to follow in this casenot less than in the former. The workingmen, therefore,reacting against the attempt at, or the act of, loweringwages, would act rightly. They would, therefore, actrightly in enforcing a rise of wages, because every reac-tion against the lowering of wages is an action for rais-ing wages. According to Citizen Weston’s own principleof the constancy of wages, the workingmen ought, there-fore, under certain circumstances, to combine and strug-

VALUE, PR I CE AND PR OFI T.


gle for a rise of wages.If he denies this conclusion, he must give up the prem-

ise from which it flows. He must not say that the amountof wages is a constant quantity, but that, although itcannot and must not rise, it can and must fall, whenevercapital pleases to lower it. If the capitalist pleases tofeed you upon potatoes instead of upon meat, and uponoats instead of upon wheat, you must accept his will as alaw of political economy, and submit to it. If in one coun-try the rate of wages is higher than in another, in theUnited States, for example, than in England, you mustexplain this difference in the rate of wages by a differ-ence between the will of the American capitalist and thewill of the English capitalist, a method which would cer-tainly very much simplify, not only the study of economicphenomena, but of all other phenomena.

But even then, we might ask, why the will of theAmerican capitalist differs from the will of the Englishcapitalist? And to answer the question you must go be-yond the domain of will. A person may tell me that Godwills one thing in France, and another thing in England.If I summon him to explain this duality of will, he mighthave the brass to answer me that God wills to have onewill in France and another will in England. But ourfriend Weston is certainly the last man to make an ar-gument of such a complete negation of all reasoning.

The will of the capitalist is certainly to take as muchas possible. What we have to do is not to talk about hiswill, but to enquire into his power, the limits of thatpower, and character of those limits.


CHAPTER II.

PRODUCTION, WAGES, PROFITS.

The address Citizen Weston read to us might havebeen compressed into a nutshell.

All his reasoning amounted to this: If the workingclass forces the capitalist class to pay five shillings in-stead of four shillings in the shape of money wages, thecapitalist will return in the shape of commodities fourshillings’ worth. The working class would have to payfive shillings for what, before the rise of wages, theybought with four shillings. But why is this the case?Why does the capitalist only return four shillings’ worthfor five shillings? Because the amount of wages is fixed.But why is it fixed at four shillings’ worth of commodi-ties? Why not at three, or two, or any other sum? If thelimit of the amount of wages is settled by an economiclaw, independent alike of the will of the capitalist andthe will of the workingman, the first thing Citizen Wes-ton had to do was to state that law and prove it. Heought then, moreover, to have proved that the amount ofwages actually paid at every given moment always cor-responds exactly to the necessary amount of wages, andnever deviates from it. If, on the other hand, the givenlimit of the amount of wages is founded on the mere willof the capitalist, or the limits of his avarice, it is an arbi-trary limit. There is nothing necessary in it. It may bechanged by the will of the capitalist, and may, therefore,be changed against his will.

Citizen Weston illustrated his theory by telling you



that when a bowl contains a certain quantity of soup, tobe eaten by a certain number of persons, an increase inthe broadness of the spoons would not produce an in-crease in the amount of soup. He must allow me to findthis illustration rather spoony. It reminded me some-what of the simile employed by Menenius Agrippa.When the Roman plebeians struck against the Romanpatricians, the patrician Agrippa told them that the pa-trician belly fed the plebeian members of the body poli-tic. Agrippa failed to show that you feed the members ofone man by filling the belly of another. Citizen Weston,on his part, has forgotten that the bowl from which theworkmen eat is filled with the whole produce of the na-tional labor, and that what prevents them fetching moreout of it is neither the narrowness of the bowl nor thescantiness of its contents, but only the smallness of theirspoons.

By what contrivance is the capitalist enabled to re-turn four shillings’ worth for five shillings? By raisingthe price of the commodity he sells. Now, does a rise andmore generally a change in the prices of commodities, dothe prices of commodities themselves, depend on themere will of the capitalist? Or are, on the contrary, cer-tain circumstances wanted to give effect to that will? Ifnot, the ups and downs, the incessant fluctuations ofmarket prices, become an insoluble riddle.

As we suppose that no change whatever has takenplace either in the productive powers of labor, or in theamount of capital and labor employed, or in the value ofthe money wherein the values of products are estimated,but only a change in the rate of wages, how could thatrise of wages affect the prices of commodities? Only byaffecting the actual proportion between the demand for,

PR ODUCTI ON, WAGES, PR OFI TS.


and the supply of, these commodities.It is perfectly true that, considered as a whole, the

working class spends, and must spend, its income uponnecessaries. A general rise in the rate of wages would,therefore, produce a rise in the demand for, and conse-quently in the market prices of, necessaries. The capital-ists who produce these necessaries would be compen-sated for the risen wages by the rising market prices oftheir commodities. But how with the other capitalistswho do not produce necessaries? And you must not fancythem a small body. If you consider that two-thirds of thenational produce are consumed by one-fifth of the popu-lation—a member of the House of Commons stated itrecently to be but one-seventh of the population—youwill understand what an immense proportion of the na-tional produce must be produced in the shape of luxu-ries, or be exchanged for luxuries, and what an immenseamount of the necessaries themselves must be wastedupon flunkeys, horses, cats, and so forth, a waste weknow from experience to become always much limitedwith the rising prices of necessaries.

Well, what would be the position of those capitalistswho do not produce necessaries? For the fall in the rateof profit, consequent upon the general rise of wages, theycould not compensate themselves by a rise in the price oftheir commodities, because the demand for those com-modities would not have increased. Their income wouldhave decreased, and from this decreased income theywould have to pay more for the same amount of higher-priced necessaries. But this would not be all. As theirincome had diminished they would have less to spendupon luxuries, and therefore their mutual demand fortheir respective commodities would diminish. Conse-



quent upon this diminished demand the prices of theircommodities would fall. In these branches of industry,therefore, the rate of profit would fall, not only in simpleproportion to the general rise in the rate of wages, but inthe compound ratio of the general rise of wages, the risein the prices of necessaries, and the fall in the prices ofluxuries.

What would be the consequence of this difference inthe rates of profit for capitals employed in the differentbranches of industry? Why, the consequence that gener-ally obtains whenever, from whatever reason, the aver-age rate of profit comes to differ in different spheres ofproduction. Capital and labor would be transferred fromthe less remunerative to the more remunerativebranches; and this process of transfer would go on untilthe supply in the one department of industry would haverisen proportionately to the increased demand, andwould have sunk in the other departments according tothe decreased demand. This change effected, the generalrate of profit would again be equalized in the differentbranches. As the whole derangement originally arosefrom a mere change in the proportion of the demand for,and supply of, different commodities, the cause ceasing,the effect would cease, and prices would return to theirformer level and equilibrium. Instead of being limited tosome branches of industry, the fall in the rate of profitconsequent upon the rise of wages would have becomegeneral. According to our supposition, there would havetaken place no change in the productive powers of labor,nor in the aggregate amount of production, but thatgiven amount of production would have changed its form.A greater part of the produce would exist in the shape ofnecessaries, a lesser part in the shape of luxuries, or



what comes to the same, a lesser part would be ex-changed for foreign luxuries, and be consumed in itsoriginal form, or, what again comes to the same, agreater part of the native produce would be exchangedfor foreign necessaries instead of for luxuries. The gen-eral rise in the rate of wages would, therefore, after atemporary disturbance of market prices, only result in ageneral fall of the rate of profit without any permanentchange in the prices of commodities.

If I am told that in the previous argument I assumethe whole surplus wages to be spent upon necessaries, Ianswer that I have made the supposition most advanta-geous to the opinion of Citizen Weston. If the surpluswages were spent upon articles formerly not enteringinto the consumption of the workingmen, the real in-crease of their purchasing power would need no proof.Being, however, only derived from an advance of wages,that increase of their purchasing power must exactlycorrespond to the decrease of the purchasing power ofthe capitalists. The aggregate demand for commoditieswould, therefore, not increase, but the constituent partsof that demand would change. The increasing demand onthe one side would be counterbalanced by the decreasingdemand on the other side. Thus the aggregate demandremaining stationary, no change whatever could takeplace in the market prices of commodities.

You arrive, therefore, at this dilemma: Either the sur-plus wages are equally spent upon all articles of con-sumption—then the expansion of demand on the part ofthe working class must be compensated by the contrac-tion of demand on the part of the capitalist class—or thesurplus wages are only spent upon some articles whosemarket prices will temporarily rise. Then the consequent



rise in the rate of profit in some, and the consequent fallin the rate of profit in other branches of industry willproduce a change in the distribution of capital and labor,going on until the supply is brought up to the increaseddemand in the one department of industry, and broughtdown to the diminished demand in the other depart-ments of industry. On the one supposition there will oc-cur no change in the prices of commodities. On the othersupposition, after some fluctuations of market prices, theexchangeable values of commodities will subside to theformer level. On both suppositions the general rise in therate of wages will ultimately result in nothing else but ageneral fall in the rate of profit.

To stir up your powers of imagination Citizen Westonrequested you to think of the difficulties which a generalrise of English agricultural wages from nine shillings toeighteen shillings would produce. Think, he exclaimed,of the immense rise in the demand for necessaries, andthe consequent fearful rise in their prices! Now, all ofyou know that the average wages of the American agri-cultural laborer amount to more than double that of theEnglish agricultural laborer, although the prices of agri-cultural produce are lower in the United States than inthe United Kingdom, although the general relations ofcapital and labor obtain in the United States the sameas in England, and although the annual amount of pro-duction is much smaller in the United States than inEngland.1 Why, then, does our friend ring this alarum

1 It were almost superfluous to observe, that in the thirty-five years

that have elapsed since Karl Marx wrote this, the relative conditions ofthe United States and England, not only in agriculture but in all linesof production, have undergone considerable changes, which, however,



bell? Simply to shift the real question before us. A sud-den rise of wages from nine shillings to eighteen shil-lings would be a sudden rise to the amount of 100 percent. Now, we are not at all discussing the questionwhether the general rate of wages in England could besuddenly increased by 100 per cent. We have nothing atall to do with the magnitude of the rise, which in everypractical instance must depend on, and be suited to,given circumstances. We have only to inquire how a gen-eral rise in the rate of wages, even if restricted to oneper cent., will act.

Dismissing friend Weston’s fancy rise of 100 per cent.,I propose calling your attention to the real rise of wagesthat took place in Great Britain from 1849 to 1859.

You are all aware of the Ten Hours Bill, or ratherTen-and-a-half Hours Bill, introduced since 1848. Thiswas one of the greatest economic changes we have wit-nessed. It was a sudden and compulsory rise of wages,not in some local trades, but in the leading industrialbranches by which England sways the markets of theworld. It was a rise of wages under circumstances singu-larly unpropitious. Dr. Ure, Professor Senior, and all theother official economical mouthpieces of the middle class,proved, and I must say upon much stronger groundsthan those of our friend Weston, that it would sound thedeath-knell of English industry. They proved that it notonly amounted to a simple rise of wages, but to a rise ofwages initiated by, and based upon, a diminution of thequantity of labor employed. They asserted that thetwelfth hour you wanted to take from the capitalist was

do not in the least affect his argument and conclusions.—LUCIENSANIAL.



exactly the only hour from which he derived his profit.They threatened a decrease of accumulation, rise ofprices, loss of markets, stinting of production, conse-quent reaction upon wages, ultimate ruin. In fact, theydeclared Maximilian Robespierre’s Maximum Laws to bea small affair compared to it; and they were right in acertain sense. Well, what was the result? A rise in themoney wages of the factory operatives, despite the cur-tailing of the working day, a great increase in the num-ber of factory hands employed, a continuous fall in theprices of their products, a marvelous development in theproductive powers of their labor, an unheard-of progres-sive expansion of the markets for their commodities. InManchester, at the meeting, in 1860, of the Society forthe Advancement of Science, I myself heard Mr. New-man confess that he, Dr. Ure, Senior, and all other offi-cial propounders of economic science had been wrong,while the instinct of the people had been right. I mentionMr. W. Newman, not Professor Francis Newman, be-cause he occupies an eminent position in economic sci-ence, as the contributor to, and editor of, Mr. ThomasTooke’s History of Prices, that magnificent work whichtraces the history of prices from 1793 to 1856. If ourfriend Weston’s fixed idea of a fixed amount of wages, afixed amount of production, a fixed degree of the produc-tive power of labor, a fixed and permanent will of thecapitalists, and all his other fixedness and finality werecorrect, Professor Senior’s woeful forebodings wouldhave been right, and Robert Owen, who already in 1816proclaimed a general limitation of the working day thefirst preparatory step to the emancipation of the workingclass, and actually in the teeth of the general prejudiceinaugurated it on his own hook in his cotton factory at



New Lanark, would have been wrong.In the very same period during which the introduction

of the Ten Hours Bill, and the rise of wages consequentupon it, occurred, there took place in Great Britain, forreasons which it would be out of place to enumeratehere, a general rise in agricultural wages.

Although it is not required for my immediate purpose,in order not to mislead you, I shall make some prelimi-nary remarks.

If a man got two shillings weekly wages, and if hiswages rose to four shillings, the rate of wages wouldhave risen by 100 per cent. This would seem a verymagnificent thing if expressed as a rise in the rate ofwages, although the actual amount of wages, four shil-lings weekly, would still remain a wretchedly small, astarvation pittance. You must not, therefore, allow your-selves to be carried away by the high sounding per cents.in the rate of wages. You must always ask, What was theoriginal amount?

Moreover, you will understand, that if there were tenmen receiving each 2s. per week, five men receiving each5s., and five men receiving 11s. weekly, the twenty mentogether would receive 100s., or £5, weekly. If then arise, say by 20 per cent., upon the aggregate sum of theirweekly wages took place, there would be an advancefrom £5 to £6. Taking the average, we might say that thegeneral rate of wages had risen by 20 per cent., although,in fact, the wages of the ten men had remained station-ary, the wages of the one lot of five men had risen from5s. to 6s. only, and the wages of the other lot of five menfrom 55s. to 70s. One half of the men would not have im-proved at all their position, one quarter would have im-proved it in an imperceptible degree, and only one quar-



ter would have bettered it really. Still, reckoning by theaverage, the total amount of wages of those twenty menwould have increased by 20 per cent, and as far as theaggregate capital that employs them, and the prices ofthe commodities they produce, are concerned, it wouldbe exactly the same as if all of them had equally sharedin the average rise of wages. In the case of agriculturallabor, the standard wages being very different in the dif-ferent counties of England and Scotland, the rise af-fected them very unequally.

Lastly, during the period when that rise of wages tookplace counteracting influences were at work, such as thenew taxes consequent upon the Russian war, the exten-sive demolition of the dwelling-houses of the agriculturallaborers, and so forth.

Having premised so much, I proceed to state that from1849 to 1859 there took place a rise of about 40 per cent.in the average rate of the agricultural wages of GreatBritain. I could give you ample details in proof of my as-sertion, but for the present purpose think it sufficient torefer you to the conscientious and critical paper read in1860 by the late Mr. John C. Morton at the London Soci-ety of Arts on “The Forces Used in Agriculture.” Mr.Morton gives the returns, from bills and other authenticdocuments, which he had collected from about one hun-dred farmers, residing in twelve Scotch and thirty-fiveEnglish counties.

According to our friend Weston’s opinion, and takentogether with the simultaneous rise in the wages of thefactory operatives, there ought to have occurred a tre-mendous rise in the prices of agricultural produce duringthe period 1849 to 1859. But what is the fact? Despitethe Russian war, and the consecutive unfavorable har-



vests from 1854 to 1856, the average price of wheat,which is the leading agricultural produce of England, fellfrom about £3 per quarter for the years 1838 to 1848 toabout £2 10s. per quarter for the years 1849 to 1859.This constitutes a fall in the price of wheat of more than16 per cent. simultaneous with an average rise of agri-cultural wages of 40 per cent. During the same period, ifwe compare its end with its beginning, 1859 with 1849,there was a decrease of official pauperism from 934,419to 860,470, the difference being 73,949; a very small de-crease, I grant, and which in the following years wasagain lost, but still a decrease.

It might be said that, consequent upon the abolition ofthe Corn Laws, the import of foreign corn was more thandoubled during the period from 1849 to 1859, as com-pared with the period from 1838 to 1848. And what ofthat? From Citizen Weston’s standpoint one would haveexpected that this sudden, immense, and continuouslyincreasing demand upon foreign markets must have sentup the prices of agricultural produce there to a frightfulheight, the effect of increased demand remaining thesame whether it comes from without or from within.What was the fact? Apart from some years of failingharvests, during all that period the ruinous fall in theprice of corn formed a standing theme of declamation inFrance; the Americans were again and again compelledto burn their surplus produce; and Russia, if we are tobelieve Mr. Urquhart, prompted the Civil War in theUnited States because her agricultural exports werecrippled by the Yankee competition in the markets ofEurope.

Reduced to its abstract form, Citizen Weston’s argu-ment would come to this: Every rise in demand occurs



always on the basis of a given amount of production. Itcan, therefore, never increase the supply of the articlesdemanded, but can only enhance their money prices. Nowthe most common observation shows that an increaseddemand will, in some instances, leave the market pricesof commodities altogether unchanged, and will, in otherinstances, cause a temporary rise of market prices fol-lowed by an increased supply, followed by a reduction ofthe prices to their original level, and in many cases be-low their original level. Whether the rise of demandsprings from surplus wages, or from any other cause,does not at all change the conditions of the problem.From Citizen Weston’s standpoint the general phenome-non was as difficult to explain as the phenomenon occur-ring under the exceptional circumstances of a rise ofwages. His argument had, therefore, no peculiar bearingwhatever upon the subject we treat. It only expressedhis perplexity at accounting for the laws by which anincrease of demand produces an increase of supply, in-stead of an ultimate rise of market prices.


CHAPTER III.

WAGES AND CURRENCY.

On the second day of the debate our friend Westonclothed his old assertions in new forms. He said: Conse-quent upon a general rise in money wages, more cur-rency will be wanted to pay the same wages. The cur-rency being fixed, how can you pay with this fixed cur-rency increased money wages? First the difficulty aroseform the fixed amount of commodities accruing to theworkingman despite his increase of money wages; now itarises from the increased money wages, despite the fixedamount of commodities. Of course, if you reject his origi-nal dogma, his secondary grievance will disappear.

However, I shall show that this currency question hasnothing at all to do with the subject before us.

In your country the mechanism of payments is muchmore perfected than in any other country of Europe.Thanks to the extent and concentration of the bankingsystem, much less currency is wanted to circulate thesame amount of values, and to transact the same or agreater amount of business. For example, as far aswages are concerned, the English factory operative payshis wages weekly to the shopkeeper, who sends themweekly to the banker, who returns them weekly to themanufacturer, who again pays them away to his work-ingmen, and so forth. By this contrivance the yearlywages of an operative, say of £52, may be paid by onesingle sovereign turning round every week in the samecircle. Even in England the mechanism is less perfect



than in Scotland, and is not everywhere equally perfect;and therefore we find, for example, that in some agricul-tural districts, as compared with the mere factory dis-tricts, much more currency is wanted to circulate a muchsmaller amount of values.

If you cross the Channel you will find that the moneywages are much lower than in England, but that theyare circulated in Germany, Italy, Switzerland, andFrance by a much larger amount of currency. The samesovereign will not be so quickly intercepted by thebanker or returned to the industrial capitalist; and,therefore, instead of one sovereign circulating £52yearly, you want, perhaps, three sovereigns to circulateyearly wages to the amount of £25. Thus, by comparingcontinental countries with England, you will see at oncethat low money wages may require a much larger cur-rency for their circulation than high money wages, andthat this is, in fact, a merely technical point, quite for-eign to our subject.

According to the best calculations I know, the yearlyincome of the working class of this country may be esti-mated at £250,000,000. This immense sum is circulatedby about £3,000,000. Suppose a rise of wages of fifty percent. to take place. Then, instead of three millions ofcurrency, four and a half millions would be wanted. As avery considerable part of the working-man’s daily ex-penses is laid out in silver and copper, that is to say, inmere tokens, whose relative value to gold is arbitrarilyfixed by law, like that of inconvertible money paper, arise of money wages by fifty per cent. would, in the ex-treme case, require and additional circulation of sover-eigns, say to the amount of one million. One million, nowdormant, in the shape of bullion or coin, in the cellars of

WAGES AND CUR R ENCY.


the Bank of England, or of private bankers, would circu-late. But even the trifling expense resulting from theadditional minting or the additional wear and tear ofthat million might be spared, and would actually bespared, if any friction should arise from the want of theadditional currency. All of you know that the currency ofthis country is divided into two great departments. Onesort, supplied by bank-notes of different descriptions, isused in the transactions between dealers and dealers,and the larger payments from consumers to dealers,while another sort of currency, metallic coin, circulatesin the retail trade. Although distinct, these two sorts ofcurrency intermix with each other. Thus gold coin, to avery great extent, circulates even in larger payments forall the odd sums under £5. If to-morrow £4 notes, or £3notes, or £2 notes were issued, the gold filling thesechannels of circulation would at once be driven out ofthem, and flow into those channels where they would beneeded from the increase of money wages. Thus the ad-ditional million required by an advance of wages by fiftyper cent. would be supplied without the addition of onesingle sovereign. The same effect might be produced,without one additional bank-note, by an additional billcirculation, as was the case in Lancashire for a very con-siderable time.

If a general rise in the rate of wages, for example, of100 per cent, as Citizen Weston supposed it to take placein agricultural wages, would produce a great rise in theprices of necessaries, and, according to his views, requirean additional amount of currency not to be procured, ageneral fall in wages must produce the same effect, onthe same scale, in an opposite direction. Well! All of youknow that the years 1858 to 1860 were the most pros-



perous years for the cotton industry, and that peculiarlythe year 1860 stands in that respect unrivaled in theannals of commerce, while at the same time all otherbranches of industry were most flourishing. The wagesof the cotton operatives and of all the other workingmenconnected with their trade stood, in 1860, higher thanever before. The American crisis came, and those aggre-gate wages were suddenly reduced to about one-fourth oftheir former amount. This would have been in the oppo-site direction a rise of 400 per cent. If wages rise fromfive to twenty, we say that they rise by 300 per cent.; ifthey fall from twenty to five, we say that they fall byseventy-five per cent; but the amount of rise in the oneand the amount of fall in the other case would be thesame, namely, fifteen shillings. This, then, was a suddenchange in the rate of wages unprecedented, and at thesame time extending over a number of operatives which,if we count all the operatives not only directly engagedin but indirectly dependent upon the cotton trade, waslarger by one-half than the number of agricultural labor-ers. Did the price of wheat fall? It rose from the annualaverage of 47s. 8d. per quarter during the three years of1858 to 1860 to the annual average of 55s. 10d. perquarter during the three years 1861 to 1863. As to thecurrency, there were coined in the mint in 1861£8,673,232, against £3,378,792 in 1860. That is to say,there were coined £5,294,440 more in 1861 than in 1860.It is true the bank-note circulation was in 1861 less by£1,319,000 than in 1860. Take this off. There remainsstill an overplus of currency for the year 1861, as com-pared with the prosperity year, 1860, to the amount of£3,975,440, or about £4,000,000; but the bullion reservein the Bank of England had simultaneously decreased,

WAGES AND CUR R ENCY.


not quite to the same, but in an approximating propor-tion.

Compare the year 1862 with 1842. Apart from theimmense increase in the value and amount of commodi-ties circulated, in 1862 the capital paid in regular trans-actions for shares, loans, etc., for the railways in Eng-land and Wales amounted alone to £320,000,000, a sumthat would have appeared fabulous in 1842. Still, theaggregate amounts in currency in 1862 and 1842 werepretty nearly equal, and generally you will find a ten-dency to a progressive diminution of currency in the faceof an enormously increasing value, not only of commodi-ties, but of monetary transactions generally. From ourfriend Weston’s standpoint this is an unsolvable riddle.

Looking somewhat deeper into this matter, he wouldhave found that, quite apart from wages, and supposingthem to be fixed, the value and mass of the commoditiesto be circulated, and generally the amount of monetarytransactions to be settled, vary daily; that the amount ofbank-notes issued varies daily; that the amount of pay-ments realized without the intervention of any money,by the instrumentality of bills, checks, book-credits,clearing houses, varies daily; that, as far as actual me-tallic currency is required, the proportion between thecoin in circulation and the coin and bullion in reserve orsleeping in the cellars of banks varies daily; that theamount of bullion absorbed by the national circulationand the amount being sent abroad for international cir-culation vary daily. He would have found that thisdogma of a fixed currency is a monstrous error, incom-patible with our every-day movement. He would haveinquired into the laws which enable a currency to adaptitself to circumstances so continually changing, instead



of turning his misconception of the laws of currency intoan argument against a rise of wages.


CHAPTER IV.

SUPPLY AND DEMAND.

Our friend Weston accepts the Latin proverb that“repetitio est mater studiorum,” that is to say, that repe-tition is the mother of study, and consequently he re-peated his original dogma again under the new form,that the contraction of currency, resulting from an en-hancement of wages, would produce a diminution ofcapital, and so forth. Having already dealt with his cur-rency crotchet, I consider it quite useless to enter uponthe imaginary consequences he fancies to flow from hisimaginary currency mishap. I shall proceed to at oncereduce his one and the same dogma, repeated in so manydifferent shapes, to its simplest theoretical form.

The uncritical way in which he has treated his subjectwill become evident from one single remark. He pleadsagainst a rise of wages or against high wages as the re-sult of such a rise. Now, I ask him, What are high wagesand what are low wages? Why constitute, for example,five shillings weekly low, and twenty shillings weeklyhigh wages? If five is low as compared with twenty,twenty is still lower as compared with two hundred. If aman was to lecture on the thermometer, and commencedby declaiming on high and low degrees, he would impartno knowledge whatever. He must first tell me how thefreezing-point is found out, and how the boiling-point,and how these standard points are settled by naturallaws, not by the fancy of the sellers or makers of ther-mometers. Now, in regard to wages and profits, Citizen



Weston has not only failed to deduce such standardpoints from economic laws, but he has not even felt thenecessity to look after them. He satisfied himself withthe acceptance of the popular slang terms of low andhigh as something having a fixed meaning, although it isself-evident that wages can only be said to be high or lowas compared with a standard by which to measure theirmagnitudes.

He will be unable to tell me why a certain amount ofmoney is given for a certain amount of labor. If heshould answer me, “This was settled by the law of supplyand demand,” I should ask him, in the first instance, bywhat law supply and demand are themselves regulated.And such an answer would at once put him out of court.The relations between the supply and demand of laborundergo perpetual change, and with them the marketprices of labor. If the demand overshoots the supplywages rise; if the supply overshoots the demand wagessink, although it might in such circumstances be neces-sary to test the real state of demand and supply by astrike, for example, or any other method. But if you ac-cept supply and demand as the law regulating wages, itwould be as childish as useless to declaim against a riseof wages, because, according to the supreme law you ap-peal to, a periodical rise of wages is quite as necessaryand legitimate as a periodical fall of wages. If you do notaccept supply and demand as the law regulating wages,I again repeat the question, why a certain amount ofmoney is given for a certain amount of labor?

But to consider matters more broadly: You would bealtogether mistaken in fancying that the value of laboror any other commodity whatever is ultimately fixed bysupply and demand. Supply and demand regulate noth-

SUPPLY AND DEMAND.


ing but the temporary fluctuations of market prices.They will explain to you why the market price of a com-modity rises above or sinks below its value, but they cannever account for that value itself. Suppose supply anddemand to equilibrate, or, as the economists call it, tocover each other. Why, the very moment these oppositeforces become equal they paralyze each other, and ceaseto work in the one or the other direction. At the momentwhen supply and demand equilibrate each other, andtherefore cease to act, the market price of a commoditycoincides with its real value , with the standard priceround which its market prices oscillate. In inquiring intothe nature of that value, we have therefore nothing at allto do with the temporary effects on market prices ofsupply and demand. The same holds true of wages andof the prices of all other commodities.


CHAPTER V.

WAGES AND PRICES.

Reduced to their simplest theoretical expression, allour friend’s arguments resolve themselves into this onesingle dogma: “The prices of commodities are determinedor regulated by wages.”

I might appeal to practical observation to bear witnessagainst this antiquated and exploded fallacy. I might tellyou that the English factory operatives, miners, ship-builders, and so forth, whose labor is relatively high-priced, undersell by the cheapness of their produce allother nations; while the English agricultural laborer, forexample, whose labor is relatively low-priced, is under-sold by almost every other nation because of thedearness of his produce. By comparing article with arti-cle in the same country, and the commodities of differentcountries, I might show, apart from some exceptionsmore apparent than real, that on an average the high-priced labor produces the low-priced, and the low-pricedlabor produces the high-priced commodities. This, ofcourse, would not prove that the high price of labor inthe one, and its low price in the other instance, are therespective causes of those diametrically opposed effects,but at all events it would prove that the prices of com-modities are not ruled by the prices of labor. However, itis quite superfluous for us to employ this empiricalmethod.

It might, perhaps, be denied that Citizen Weston hasput forward the dogma: “The prices of commodities are

WAGES AND PR I CES.


determined or regulated by wages.” In point of fact, hehas never formulated it. He said, on the contrary, thatprofit and rent form also constituent parts of the pricesof commodities, because it is out of the prices of com-modities that not only the workingman’s wages, but alsothe capitalist’s profits and the landlord’s rents must bepaid. But how in his idea are prices formed? First bywages. Then an additional percentage is joined to theprice on behalf of the capitalist, and another additionalpercentage on behalf of the landlord. Suppose the wagesof the labor employed in the production of a commodityto be ten. If the rate of profit was 100 per cent., to thewages advanced the capitalist would add ten, and if therate of rent was also 100 per cent. upon the wages, therewould be added ten more, and the aggregate price of thecommodity would amount to thirty. But such a determi-nation of prices would be simply their determination bywages. If wages in the above case rose to twenty, theprice of the commodity would rise to sixty, and so forth.Consequently all the superannuated writers on politicaleconomy who propounded the dogma that wages regu-late prices, have tried to prove it by treating profit andrent as mere additional percentages upon wages. None ofthem were, of course, able to reduce the limits of thosepercentages to any economic law. They seem, on the con-trary, to think profits settled by tradition, custom, thewill of the capitalist, or by some other equally arbitraryand inexplicable method. If they assert that they are set-tled by the competition between the capitalists, they saynothing. That competition is sure to equalize the differ-ent rates of profit in different trades, or reduce them toone average level, but it can never determine the levelitself, or the general rate of profit.



What do we mean by saying that the prices of thecommodities are determined by wages? Wages being buta name for the price of labor, we mean that the prices ofcommodities are regulated by the price of labor. As“price” is exchangeable value—and in speaking of value Ispeak always of exchangeable value—is exchangeablevalue expressed in money, the proposition comes to this,that “the value of commodities is determined by thevalue of labor,” or that “the value of labor is the generalmeasure of value.”

But how, then, is the “value of labor” itself deter-mined? Here we come to a standstill. Of course, to astandstill if we try reasoning logically. Yet the pro-pounders of that doctrine make short work of logicalscruples. Take our friend Weston, for example. First hetold us that wages regulate the price of commodities, andthat consequently when wages rise prices must rise.Then he turned round to show us that a rise of wageswill be no good because the prices of commodities hadrisen, and because wages were indeed measured by theprices of the commodities upon which they are spent.Thus we begin by saying that the value of labor deter-mines the value of commodities, and we wind up by say-ing that the value of commodities determines the valueof labor. Thus we move to and fro in the most vicious cir-cle, and arrive at no conclusion at all.

On the whole, it is evident that by making the value ofone commodity, say labor, corn, or any other commodity,the general measure and regulator of value, we onlyshift the difficulty, since we determine one value by an-other, which on its side wants to be determined.

The dogma that “wages determine the price of com-modities,” expressed in its most abstract terms, comes to

WAGES AND PR I CES.


this, that “value is determined by value,” and this tau-tology means that, in fact, we know nothing at all aboutvalue. Accepting this premise, all reasoning about thegeneral laws of political economy turns into mere twad-dle. It was, therefore, the great merit of Ricardo that inhis work on The Principles of Political Economy, pub-lished in 1817, he fundamentally destroyed the old,popular, and worn-out fallacy that “wages determineprices,” a fallacy which Adam Smith and his Frenchpredecessors had spurned in the really scientific parts oftheir researches, but which they reproduced in theirmore exoterical and vulgarizing chapters.


CHAPTER VI.

VALUE AND LABOR.

Citizens, I have now arrived at a point where I mustenter upon the real development of the question. I can-not promise to do this in a very satisfactory way, becauseto do so I should be obliged to go over the whole field ofpolitical economy. I can, as the French would say, but“effleurer la question,” touch upon the main points.

The first question we have to put is: What is the valueof a commodity? How is it determined?

At first sight it would seem that the value of a com-modity is a thing quite relative, and not to be settledwithout considering one commodity in its relations to allother commodities. In fact, in speaking of the value, thevalue in exchange of a commodity, we mean the propor-tional quantities in which it exchanges with all othercommodities. But then arises the question: How are theproportions in which commodities exchange with eachother regulated?

We know from experience that these proportions varyinfinitely. Taking one single commodity, wheat, for in-stance, we shall find that a quarter of wheat exchangesin almost countless variations of proportion with differ-ent commodities. Yet, its value being exactly the same,whether expressed in silk, gold, or any other commodity,it must be something distinct from, and independent of,these different rates of exchange with different articles.It must be possible to express, in a very different form,these various equations with various commodities.

Besides, if I say a quarter of wheat exchanges with

VALUE AND LABOR .


iron in a certain proportion, or the value of a quarter ofwheat is expressed in a certain amount of iron, I saythat the value of wheat and its equivalent in iron areequal to some third thing, which is neither wheat noriron, because I suppose them to express the same magni-tude in two different shapes. Either of them, the wheator the iron, must, therefore, independently of the other,be reducible to this third thing which is their commonmeasure.

To elucidate this point I shall recur to a very simplegeometrical illustration. In comparing the areas of tri-angles of all possible forms and magnitudes, or compar-ing triangles with rectangles, or any other rectilinearfigure, how do we proceed? We reduce the area of anytriangle whatever to an expression quite different fromits visible form. Having found from the nature of the tri-angle that its area is equal to half the product of its baseby its height, we can then compare the different valuesof all sorts of triangles, and of all rectilinear figureswhatever, because all of them may be resolved into acertain number of triangles.

The same mode of procedure must obtain with thevalues of commodities. We must be able to reduce all ofthem to an expression common to all, and distinguishingthem only by the proportions in which they contain thatidentical measure.

As the exchangeable values of commodities are onlysocial functions of those things, and have nothing at allto do with the natural qualities, we must first ask, Whatis the common social substance of all commodities? It islabor. to produce a commodity a certain amount of labormust be bestowed upon it, or worked up in it. and I saynot only labor, but social labor. A man who produces an



article for his own immediate use, to consume it himself,creates a product, but not a commodity . As a self-sustaining producer he has nothing to do with society.But to produce a commodity, a man must not only pro-duce an article satisfying some social want, but his laboritself must form part and parcel of the total sum of laborexpended by society. It must be subordinate to the divi-sion of labor within society. It is nothing without theother divisions of labor, and on its part is required tointegrate them.

If we consider commodities as values, we considerthem exclusively under the single aspect of realized,fixed, or, if you like, crystallized social labor. In this re-spect they can differ only by representing greater orsmaller quantities of labor, as, for example, a greateramount of labor may be worked up in a silken handker-chief than in a brick. But how does one measure quanti-ties of labor? By the time the labor lasts, in measuringthe labor by the hour, the day, etc. Of course, to applythis measure, all sorts of labor are reduced to average orsimple labor as their unit.

We arrive, therefore, at this conclusion. A commodityhas a value, because it is a crystallization of social labor.The greatness of its value, or its relative value, dependsupon the greater or less amount of that social substancecontained in it; that is to say, on the relative mass of la-bor necessary for its production. The relative values ofcommodities are, therefore, determined by the respectivequantities or amounts of labor, worked up, realized, fixedin them.2 The correlative quantities of commodities

2 The law of value, as stated by Karl Marx, is in economics what thelaw of gravitation is in physics. While all commodities are fundamen-tally subject to the law of value, just as all bodies are subject the law of

VALUE AND LABOR .


which can be produced in the same time of labor areequal. Or the value of one commodity is to the value ofanother commodity as the quantity of labor fixed in theone is to the quantity of labor fixed in the other.

I suspect that many of you will ask, Does then, indeed,there exist such a vast, or any difference whatever, be-tween determining the values of commodities by wages, gravitation, there are in both cases perturbations, which, when exam-ined, afford further proof of the truth and universality of the law.

For example: According to the law of gravitation, all bodies raisedinto the air, when left unsupported, fall to the earth in a direct linewith its center. Yet, if the wind blows, the line of descent of the fallingbody will be more or less oblique, according to the strength of the wind.A projectile describes a parabola, which is the “resultant” of the force ofprojection and the force of gravity, variously modified by the resistanceof the air, the form and density of the missile, and other factors. Aballoon filled with a gas lighter than air rises in the air instead of fal-ling; but in a vacuum it falls. Again, in the air a piece of iron fallsmuch more swiftly that a feather, but in a vacuum all bodies fall at thesame rate of speed, etc. Not only are all these apparent “contradic-tions” readily explained, but the great perturbations in the heavens,examined in the light of the law of gravitation, have enabled the as-tronomer to discover the location and motion of planets and stars,whose existence was previously unsuspected.

Likewise, according to the law of value, commodities exchange foreach other in proportion to the amount of socially necessary labor em-bodied in them, respectively. But the capitalistic wind of “supply anddemand,” ranging from a breeze in ordinary times to a tornado in acrisis, disturbs the proportion according to its strength. Yet the lawasserts itself, chiefly through those alternate rises and falls of price,which in economics correspond to the oscillations of the pendulum inphysics. If the swing of the market is less regular than that of the pen-dulum, it is simply because of the many capitalistic factors of distur-bance, besides the so-called “law of supply and demand.” Were ourstatistics as honest and perfect as the data upon which the astronomermakes his calculations, every change of value, normal or abnor-mal—i.e., resulting either from some change in the methods of produc-tion, in the means of transportation, in the availability of materials,etc., on the one hand; or from competition, speculation, monopoly, etc.,on the other hand;—could be traced to its source or sources, despite thecomplexity of the capitalist machine, and the multiplicity and variabil-ity of the disturbing forces inherent to or evolved by capital it-self.—LUCIEN SANIAL.



and determining them by the relative quantities of labornecessary for their production? You must, however, beaware that the reward for labor, and quantity of labor,are quite disparate things. Suppose, for example, equalquantities of labor to be fixed in one quarter of wheatand one ounce of gold. I resort to the example because itwas used by Benjamin Franklin in his first Essay pub-lished in 1721,3 and entitled A Modest Enquiry into theNature and Necessity of a Paper Currency, where he, oneof the first, hit upon the true nature of value. Well. Wesuppose, then, that one quarter of wheat and one ounceof gold are equal values or equivalents, because they arecrystallizations of equal amounts of average labor, of somany days’ or so many weeks’ labor respectively fixed inthem. In thus determining the relative values of goldand corn, do we refer in any way whatever to the wagesof the agricultural laborer and the miner? Not a bit. Weleave it quite indeterminate how their day’s or theirweek’s labor was paid, or even whether wages labor wasemployed at all. If it was, wages may have been veryunequal. The laborer whose labor is realized in the quar-ter of wheat may receive two bushels only, and the la-borer employed in mining may receive on-half of theounce of gold. Or, supposing their wages to be equal,they may deviate in all possible proportions from thevalues of the commodities produced by them. They mayamount to one-half, one-third, one-fourth, one-fifth, orany other proportional part of the one quarter of corn orthe one ounce of gold. Their wages can, of course, not ex-ceed, not be more than the values of the commoditiesthey produced, they can be less in every possible degree.

3 [This essay was published in 1729.]

VALUE AND LABOR .


Their wages will be limited by the values of the products,but the values of their products will not be limited by thewages. And above all, the values, the relative values ofcorn and gold, for example, will have been settled with-out any regard whatever to the value of the labor em-ployed, that is to say, to wages.4 To determine the valuesof commodities by the relative quantities of labor fixed inthem, is, therefore, a thing quite different from the tau-tological method of determining the values of commodi-ties by the value of labor, or by wages. This point, how-ever, will be further elucidated in the progress of our in-quiry.

In calculating the exchangeable value of a commoditywe must add to the quantity of labor last employed thequantity of labor previously worked up in the raw mate-rial of the commodity, and the labor bestowed on the im-plements, tools, machinery, and buildings, with whichsuch labor is assisted. For example, the value of a cer-tain amount of cotton-yarn is the crystallization of thequantity of labor added to the cotton during the spinningprocess, the quantity of labor previously realized in thecotton itself, the quantity of labor realized in the coal,oil, and other auxiliary substances used, the quantity oflabor fixed in the steam-engine, the spindles, the factorybuilding, and so forth. Instruments of production prop-erly so-called, such as tools, machinery, buildings, serveagain and again for a longer or shorter period duringrepeated processes of production. If they were used up atonce, like the raw material, their whole value would atonce be transferred to the commodities they assist in

4 For an explanation of this statement, reference should be made to

the footnote on page 43.



producing. But as a spindle, for example, is but gradu-ally used up, an average calculation is made, based uponthe average time it lasts, and its average waste or wearand tear during a certain period, say a day. In this waywe calculate how much of the value of the spindle istransferred to the yarn daily spin, and how much, there-fore, of the total amount of labor realized in a pound ofyarn, for example, is due to the quantity of labor previ-ously realized in the spindle. For our present purpose itis not necessary to dwell any longer upon this point.

It might seem that if the value of a commodity is de-termined by the quantity of labor bestowed upon its pro-duction, the lazier a man, or the clumsier a man, themore valuable his commodity, because the greater thetime of labor required for finishing the commodity. This,however, would be a sad mistake. You will recollect thatI used the word “Social labor,” and many points are in-volved in this qualification of “Social.” In saying that thevalue of a commodity is determined by the quantity oflabor worked up or crystallized in it, we mean the quan-tity of labor necessary for its production in a given stateof society, under certain social average conditions of pro-duction, with a given social average intensity, and aver-age skill of the labor employed. When, in England, thepower-loom came to compete with the hand-loom, onlyhalf the former time of labor was wanted to convert agiven amount of yarn into a yard of cotton or cloth. Thepoor hand-loom weaver now worked seventeen or eight-een hours daily, instead of the nine or ten hours he hadworked before. Still the product of twenty hours of hislabor represented now only ten social hours of labor, orten hours of labor socially necessary for the conversion ofa certain amount of yarn into textile stuffs. His product

VALUE AND LABOR .


of twenty hours had, therefore, no more value than hisformer product of ten hours.

If then the quantity of socially necessary labor real-ized in commodities regulates their exchangeable values,every increase in the quantity of labor wanted for theproduction of a commodity must augment its value, asevery diminution must lower it.

If the respective quantities of labor necessary for theproduction of the respective commodities remained con-stant, their relative values also would be constant. Butsuch is not the case. The quantity of labor necessary forthe production of a commodity changes continuouslywith the changes in the productive powers of the laboremployed. The greater the productive powers of labor,the more produce is finished in a given time of labor; andthe smaller the productive powers of labor, the less pro-duce is finished in the same time. If, for example, in theprogress of population it should become necessary to cul-tivate less fertile soils, the same amount of producewould be only attainable by a greater amount of laborspent, and the value of agricultural produce would con-sequently rise. On the other hand, if, with the modernmeans of production, a single spinner converts into yarn,during one working day, many thousand times theamount of cotton which he could have spun during thesame time with the spinning-wheel, it is evident thatevery single pound of cotton will absorb many thousandtimes less of spinning labor than it did before, and, con-sequently, the value added by spinning to every singlepound of cotton will be a thousand times less than be-fore. The value of yarn will sink accordingly.

Apart from the different natural energies and ac-quired working abilities of different peoples, the produc-



tive powers of labor must principally depend:—Firstly. Upon the natural conditions of labor, such as

fertility of soil, mines, and so forth.Secondly. Upon the progressive improvement of the

Social Powers of Labor, such as are derived from produc-tion on a grand scale, concentration of capital and com-bination of labor, subdivision of labor, machinery, im-proved methods, appliance of chemical and other naturalagencies, shortening of time and space by means ofcommunication and transport, and every other contriv-ance by which science presses natural agencies into theservice of labor, and by which the social or co-operativecharacter of labor is developed. The greater the produc-tive powers of labor, the less labor is bestowed upon agiven amount of produce; hence the smaller the value ofthe produce. The smaller the productive powers of labor,the more labor is bestowed upon the same amount ofproduce; hence the greater its value. As a general law wemay, therefore, set it down that: —

The values of commodities are directly as the times oflabor employed in their production, and are inversely asthe productive powers of the labor employed.

Having till now only spoken of Value, I shall add a fewwords about Price, which is a peculiar form assumed byvalue.

Price, taken by itself, is nothing but the monetary ex-pression of value. The values of all commodities of thiscountry, for example, are expressed in gold prices, whileon the Continent they are mainly expressed in silverprices. The value of gold or silver, like that of all othercommodities, is regulated by the quantity of labor neces-sary for getting them. You exchange a certain amount ofyour national products, in which a certain amount of

VALUE AND LABOR .


your national labor is crystallized, for the produce of thegold and silver producing countries, in which a certainquantity of their labor is crystallized. It is in this way, infact by barter, that you learn to express in gold and sil-ver the values of all commodities, that is the respectivequantities of labor bestowed upon them. Looking some-what closer into the monetary expression of value, orwhat comes to the same, the conversion of value intoprice, you will find that it is a process by which you giveto the values of all commodities an independent and ho-mogeneous form, or by which you express them as quan-tities of equal social labor. So far as it is but the mone-tary expression of value, price has been called naturalprice by Adam Smith, “prix necessaire” by the Frenchphysiocrats.

What then is the relation between value and marketprices, or between natural prices and market prices? Youall know that the market price is the same for all com-modities of the same kind, however the conditions ofproduction may differ for the individual producers. Themarket price expresses only the average amount of sociallabor necessary, under the average conditions of produc-tion, to supply the market with a certain mass of a cer-tain article. It is calculated upon the whole lot of a com-modity of a certain description.

So far the market price of a commodity coincides withits value. On the other hand, the oscillations of marketprices, rising now over, sinking now under the value ornatural price, depend upon the fluctuations of supplyand demand. The deviations of market prices from val-ues are continual, but as Adam Smith says: “The naturalprice is the central price to which the prices of commodi-ties are continually gravitating. Different accidents may



sometimes keep them suspended a good deal above it,and sometimes force them down even somewhat belowit. But whatever may be the obstacles which hinderthem from settling in this center of repose and continu-ance, they are constantly tending towards it.”

I cannot now sift this matter. It suffices to say the ifsupply and demand equilibrate each other, the marketprices of commodities will correspond with their naturalprices, that is to say with their values, as determined bythe respective quantities of labor required for their pro-duction. But supply and demand must constantly tend toequilibrate each other, although they do so only by com-pensating one fluctuation by another, a rise by a fall,and vice versa. If instead of considering only the dailyfluctuations you analyze the movement of market pricesfor longer periods, as Mr. Tooke, for example, has donein his History of Prices, you will find that the fluctua-tions of market prices, their deviations from values,their ups and downs, paralyze and compensate eachother; so that apart from the effect of monopolies andsome other modifications I must now pass by, all de-scriptions of commodities are, on average, sold at theirrespective values or natural prices. The average periodsduring which the fluctuations of market prices compen-sate each other are different for different kinds of com-modities, because with one kind it is easier to adaptsupply to demand than with the other.

If then, speaking broadly, and embracing somewhatlonger periods, all descriptions of commodities sell attheir respective values, it is nonsense to suppose thatprofit—not profits in individual cases, but the constantand usual profits of different trades—spring from theprices of commodities, or selling them at a price over and

VALUE AND LABOR .


above their value. The absurdity of this notion becomesevident if it is generalized. What a man would con-stantly win as a seller he would as constantly lose as apurchaser. It would not do to say that there are men whoare buyers without being sellers, or consumers withoutbeing producers. What these people pay to the produc-ers, they must first get from them for nothing. If a manfirst takes your money and afterwards returns thatmoney in buying your commodities, you will never enrichyourselves by selling your commodities too dear to thatsame man. This sort of transaction might diminish aloss, but would never help in realizing a profit.

To explain, therefore, the general nature of profits , youmust start from the theorem that, on an average, com-modities are sold at their real values, and that profits arederived from selling them at their values, that is, in pro-portion to the quantity of labor realized in them. If youcannot explain profit upon this supposition, you cannotexplain it at all. This seems paradox and contrary toevery-day observation. It is also paradox that the earthmoves round the sun, and that water consists of twohighly inflammable gases. Scientific truth is alwaysparadox, if judged by every-day experience, whichcatches only the delusive appearance of things.


CHAPTER VII.

LABORING POWER.5

Having now, as far as it could be done in such a cur-sory manner, analyzed the nature of Value, of the Valueof any commodity whatever, we must turn our attentionto the specific Value of Labor. And here, again, I muststartle you by a seeming paradox. All of you feel surethat what you daily sell is your Labor; that, therefore,Labor has a Price, and that, the price of a commoditybeing only the monetary expression of its value, theremust certainly exist such a thing as the Value of Labor .However, there exists no such thing as the Value of La-bor in the common acceptance of the word. We have seenthat the amount of necessary Labor crystallized in acommodity constitutes its value. Now, applying this no-tion of value, how could we define, say, the value of a tenhours working day? How much labor is contained in thatday? Ten hours’ labor. To say that the value of a tenhours working day is equal to ten hours’ labor, or thequantity of labor contained in it, would be a tautologicaland, moreover, a nonsensical expression. Of course, hav-ing once found out the true but hidden sense of the ex-pression “Value of Labor,” we shall be able to interpretthis irrational, and seemingly impossible application ofvalue, in the same way that, having once made sure ofthe real movement of the celestial bodies, we shall beable to explain their apparent or merely phenomenalmovements.

5 “Labor power” in the English translation of Capital.

LABOR I NG POWER .


What the workingman sells is not directly his Labor,but his Laboring Power, the temporary disposal of whichhe makes over to the capitalist. This is so much the casethat—I do not know whether by the English Laws, butcertainly by some Continental Laws—the maximumtime is fixed for which a man is allowed to sell his labor-ing power. If allowed to do so for any indefinite periodwhatever, slavery would be immediately restored. Sucha sale, if it comprised his lifetime, for example, wouldmake him at once the lifelong slave of his employer.

One of the oldest economists and most original phi-losophers of England—Thomas Hobbes—has already, inhis Leviathan, instinctively hit upon this point over-looked by all his successors. He says: “The value or worthof a man is, as in all other things, his price: that is, somuch as would be given for the Use of his Power.”

Proceeding from this basis, we shall be able to deter-mine the Value of Labor as that of all other commodities.

But before doing so, we might ask, how does thisstrange phenomenon arise, that we find on the market aset of buyers possessed of land, machinery, raw material,and the means of subsistence, all of them, save land inits crude state, the products of labor, and on the otherhand, a set of sellers who have nothing to sell excepttheir laboring power, their working arms and brains?That the one set buy continually in order to make aprofit and enrich themselves, while the other set con-tinually sell in order to earn their livelihood? The in-quiry into this question would be an inquiry into whatthe economists call “Previous or Original Accumulation,”but which ought to be called Original Expropriation. Weshould find that this so-called Original Accumulationmeans nothing but a series of historical processes, re-



sulting in a Decomposition of the Original Union exist-ing between the Laboring Man and his Instruments ofLabor. Such an inquiry, however, lies beyond the pale ofmy present subject. The Separation between the Man ofLabor and the Instruments of Labor once established,such a state of things will maintain itself and reproduceitself upon a constantly increasing scale, until a new andfundamental revolution in the mode of production shallagain overturn it, and restore the original union in anew historical form.

What, then, is the Value of Laboring Power?Like that of every other commodity, its value is de-

termined by the quantity of labor necessary to produceit. The laboring power of a man exists only in his livingindividuality. A certain mass of necessaries must be con-sumed by a man to grow up and maintain his life. Butthe man, like the machine, will wear out, and must bereplaced by another man. Beside the mass of necessariesrequired for his own maintenance, he wants anotheramount of necessaries to bring up a certain quota ofchildren that are to replace him on the labor market andto perpetuate the race of laborers. Moreover, to develophis laboring power, and acquire a given skill, anotheramount of values must be spent. For our purpose it suf-fices to consider only average labor, the costs of whoseeducation and development are vanishing magnitudes.Still I must seize upon this occasion to state that, as thecosts of producing laboring powers of different qualitydiffer, so much differ the values of the laboring powersemployed in different trades. The cry for an equality ofwages rests, therefore, upon a mistake, is an insane wishnever to be fulfilled. It is an offspring of that false andsuperficial radicalism that accepts premises and tries to

LABOR I NG POWER .


evade conclusions. Upon the basis of the wages systemthe value of laboring power is settled like that of everyother commodity; and as different kinds of laboringpower have different values, or require different quanti-ties of labor for their production, they must fetch differ-ent prices in the labor market. To clamor for equal oreven equitable retribution on the basis of the wages sys-tem is the same as to clamor for freedom on the basis ofthe slavery system. What you think just or equitable isout of the question. The question is: What is necessaryand unavoidable with a given system of production?

After what has been said, it will be seen that the valueof laboring power is determined by the value of the ne-cessaries required to produce, develop, maintain, andperpetuate the laboring power.


CHAPTER VIII.

PRODUCTION OF SURPLUS VALUE.

Now suppose that the average amount of the dailynecessaries of a laboring man require six hours of aver-age labor for their production. Suppose, moreover, sixhours of average labor to be also realized in a quantity ofgold equal to 3s. Then 3s. would be the Price, or themonetary expression of the Daily Value of that man’sLaboring Power. If he worked daily six hours he woulddaily produce a value sufficient to buy the averageamount of his daily necessaries, or to maintain himselfas a laboring man.

But our man is a wages laborer. He must, therefore,sell his laboring power to a capitalist. If he sells it at 3s.daily, or 18s. weekly, he sells it at its value. Suppose himto be a spinner. If he works six hours daily he will add tothe cotton a value of 3s. daily. This value, daily added byhim, would be an exact equivalent for the wages, or theprice of his laboring power, received daily. But in thatcase, no surplus value or surplus produce whateverwould go to the capitalist. Here, then, we come to therub.

In buying the laboring power of the workman, andpaying its value, the capitalist, like every other pur-chaser, has acquired the right to consume or use thecommodity bought. You consume or use the laboringpower of a man by making him work, as you consume oruse a machine by making it run. By buying the daily orweekly value of the laboring power of the workman, the

PR ODUCTI ON OF SUR PLUS VALUE.


capitalist has, therefore, acquired the right to use ormake that laboring power work during the whole day orweek. The working day or the working week has, ofcourse, certain limits, but into this we shall afterwardslook more closely.

For the present I want to turn your attention to onedecisive point.

The value of the laboring power is determined by thequantity of labor necessary to maintain or reproduce it,but the use of that laboring power is only limited by theactive energies and physical strength of the laborer. Thedaily or weekly value of the laboring power is quite dis-tinct from the daily or weekly exercise of that power, thesame as the food a horse wants and the time it can carrythe horseman are quite distinct. The quantity of labor bywhich the value of the workman’s laboring power is lim-ited forms by no means a limit to the quantity of laborwhich his laboring power is apt to perform. Take the ex-ample of our spinner. We have seen that, to daily repro-duce his laboring power, he must daily reproduce a valueof three shillings, which he will do by working six hoursdaily. But this does not disable him from working ten ortwelve or more hours a day. But by paying the daily orweekly value of the spinner’s laboring power the capital-ist has acquired the right of using that laboring powerduring the whole day or week. He will, therefore, makehim work say, daily , twelve hours. Over and above thesix hours required to replace his wages, or the value ofhis laboring power, he will, therefore, have to work sixother hours, which I shall call hours of surplus labor,which surplus labor will realize itself in a surplus valueand a surplus produce. If our spinner, for example, byhis daily labor of six hours, added three shillings’ value



to the cotton, a value forming an exact equivalent to hiswages, he will, in twelve hours, add six shillings’ worthto the cotton, and produce a proportional surplus of yarn.As he has sold his laboring power to the capitalist, thewhole value of produce created by him belongs to thecapitalist, the owner pro tem. of his laboring power. Byadvancing three shillings, the capitalist will, therefore,realize a value of six shillings, because advancing avalue in which six hours of labor are crystallized, he willreceive in return a value in which twelve hours of laborare crystallized. By repeating this same process daily,the capitalist will daily advance three shillings and dailypocket six shillings, one half of which will go to paywages anew, and the other half of which will form sur-plus value, for which the capitalist pays no equivalent. Itis this sort of exchange between capital and labor uponwhich capitalist production, or the wages system, isfounded, and which must constantly result in reproduc-ing the workingman as a workingman, and the capitalistas a capitalist.

The rate of surplus value, all other circumstances re-maining the same, will depend on the proportion be-tween that part of the working day necessary to repro-duce the value of the laboring power and the surplustime or surplus labor performed for the capitalist. It will,therefore, depend on the ratio in which the working dayis prolonged over and above that extent, by workingwhich the workingman would only reproduce the valueof his laboring power, or replace his wages.


CHAPTER IX.

VALUE OF LABOR.

We must now return to the expression, “Value, orPrice of Labor.”

We have seen that, in fact, it is only the value of thelaboring power, measured by the values of commoditiesnecessary for its maintenance. But since the workmanreceives his wages after his labor is performed, andknows, moreover, that what he actually gives to thecapitalist is his labor, the value or price of his laboringpower necessarily appears to him as the price or value ofhis labor itself. If the price of his laboring power is threeshillings, in which six hours of labor are realized, and ifhe works twelve hours, he necessarily considers thesethree shillings as the value or price of twelve hours oflabor, although these twelve hours of labor realize them-selves in a value of six shillings. A double consequenceflows from this.

Firstly. The value or price of the laboring power takesthe semblance of the price or value of labor itself, al-though strictly speaking, value and price of labor aresenseless terms.

Secondly. Although one part only of the workman’sdaily labor is paid, while the other part is unpaid, andwhile that unpaid or surplus labor constitutes exactlythe fund out of which surplus value or profit is formed, itseems as if the aggregate labor was paid labor.

This false appearance distinguishes wages labor fromother historical forms of labor. On the basis of the wagessystem even the unpaid labor seems to be paid labor.



With the slave, on the contrary, even that part of his la-bor which is paid appears to be unpaid. Of course, in or-der to work the slave must live, and one part of his work-ing day goes to replace the value of his own mainte-nance. But since no bargain is struck between him andhis master, and no acts of selling and buying are goingon between the two parties, all his labor seems to begiven away for nothing.

Take, on the other hand, the peasant serf, such as he,I might say, until yesterday existed in the whole East ofEurope. This peasant worked, for example, three daysfor himself on his own field or the field allotted to him,and the three subsequent days he performed compulsoryand gratuitous labor on the estate of his lord. Here, then,the paid and unpaid parts of labor were sensibly sepa-rated, separated in time and space; and our Liberalsoverflowed with moral indignation at the preposterousnotion of making a man work for nothing.

In point of fact, however, whether a man works threedays of the week for himself on his own field and threedays for nothing on the estate of his lord, or whether heworks in the factory or the workshop six hours daily forhimself and six for his employer, comes to the same, al-though in the latter case the paid and unpaid portions oflabor are inseparably mixed up with each other, and thenature of the whole transaction is completely masked bythe intervention of a contract and the pay received at theend of the week. The gratuitous labor appears to be vol-untarily given in the one instance, and to be compulsoryin the other. That makes all the difference.

In using the word “value of labor,” I shall only use itas a popular slang term for “value of laboring power.”


CHAPTER X.

PROFIT IS MADE BY SELLING A COMMODITY AT ITS VALUE.

Suppose an average hour of labor to be realized in avalue equal to a sixpence, or twelve average hours of la-bor to be realized in six shillings. Suppose, further, thevalue of labor to be three shillings or the produce of sixhours’ labor. If, then, in the raw material, machinery,and so forth, used up in a commodity, twenty-four hoursof average labor were realized, its value would amountto twelve shillings. If, moreover, the workman employedby the capitalist added twelve hours of labor to thosemeans of production, these twelve hours would be real-ized in an additional value of six shillings. The totalvalue of the product would, therefore, amount to thirty-six hours of realized labor, and be equal to eighteen shil-lings. But as the value of labor, or the wages paid to theworkman, would be three shillings only, no equivalentwould have been paid by the capitalist for the six hoursof surplus labor worked by the workman, and realized inthe value of the commodity. By selling this commodity atits value for eighteen shillings, the capitalist would,therefore, realize a value of three shillings, for whichhad paid no equivalent. These three shillings would con-stitute the surplus value or profit pocketed by him. Thecapitalist would consequently realize the profit of threeshillings, not by selling his commodity at a price overand above its value, but by selling it at its real value.

The value of a commodity is determined by the totalquantity of labor contained in it. But part of that quan-



tity of labor is realized in a value for which an equiva-lent has been paid in the form of wages; part of it is real-ized in a value for which no equivalent has been paid.Part of the labor contained in the commodity is paid la-bor; part is unpaid labor. By selling, therefore, the com-modity at its value, that is, as the crystallization of thetotal quantity of labor bestowed upon it, the capitalistmust necessarily sell it at a profit. He sells not only whathas cost him an equivalent, but he sells also what hascost him nothing, although it has cost his workman la-bor. The cost of the commodity to the capitalist and itsreal cost are different things. I repeat, therefore, thatnormal and average profits are made by selling com-modities not above, but at their real values.


CHAPTER XI.

THE DIFFERENT PARTS INTO WHICH SURPLUS VALUE IS

DECOMPOSED.

The surplus value, or that part of the total value of thecommodity in which the surplus labor or unpaid labor ofthe workingman is realized, I call Profit. The whole ofthat profit is not pocketed by the employing capitalist.The monopoly of land enables the landlord to take onepart of that surplus value, under the name of rent,whether the land is used for agricultural buildings orrailways, or for any other productive purpose. On theother hand, the very fact that the possession of the in-struments of labor enables the employing capitalist toproduce a surplus value, or, what comes to the same, toappropriate to himself a certain amount of unpaid labor,enables the owner of the means of labor, which he lendswholly or partly to the employing capitalist—enables inone word the money-lending capitalist to claim for him-self under the name of interest another part of that sur-plus value, so that there remains to the employing capi-talist as such only what is called industrial or commer-cial profit.

By what laws this division of the total amount of sur-plus value amongst the three categories of people isregulated, is a question quite foreign to our subject. Thismuch, however, results from what has been stated.

Rent, Interest, and Industrial Profit are only differentnames for different parts of the surplus value of thecommodity, or the unpaid labor enclosed in it, and they



are equally derived from this source, and from thissource alone. They are not derived from land as such orfrom capital as such, but land and capital enable theirowners to get their respective shares out of the surplusvalue extracted by the employing capitalist from the la-borer. For the laborer himself it is a matter of subordi-nate importance whether that surplus value, the resultof his surplus labor, or unpaid labor, is altogether pock-eted by the employing capitalist, or whether the latter isobliged to pay portions of it, under the name of rent andinterest, away to third parties. Suppose the employingcapitalist to use only is own capital and to be his ownlandlord, then the whole surplus value would go into hispocket.

It is the employing capitalist who immediately ex-tracts from the laborer this surplus value, whatever partof it he may ultimately be able to keep for himself. Uponthis relation, therefore, between the employing capitalistand the wages laborer the whole wages system and thewhole present system of production hinge. Some of thecitizens who took part in our debate were, therefore,wrong in trying to mince matters, and to treat this fun-damental relation between the employing capitalist andthe workingman as a secondary question, although theywere right in stating that, under given circumstances, arise of prices might affect in very unequal degrees theemploying capitalist, the landlord, the moneyed capital-ist, and, if you please, the tax-gatherer.

Another consequence follows from what has beenstated.

That part of the value of the commodity which repre-sents only the value of the raw materials, the machin-ery, in one word, the value of the means of production

DI FFER ENT PAR TS OF SUR PLUS VALUE.


used up, forms no revenue at all, but replaces only capi-tal. But apart from this, it is false that the other part ofthe value of the commodity which forms revenue, or maybe spent in the form of wages, profits, rent, interest, isconstituted by the value of wages, the value of rent, thevalue of profits, and so forth. We shall, in the first in-stance, discard wages, and only treat industrial profits,interest, and rent. We have just seen that the surplusvalue contained in the commodity, or that part of itsvalue in which unpaid labor is realized, resolves itselfinto different fractions, bearing three different names.But it would be quite the reverse of the truth to say thatits value is composed of, or formed by, the addition of theindependent values of these three constituents.

If one hour of labor realizes itself in a value of six-pence, if the working day of the laborer comprises twelvehours, if half of this time is unpaid labor, that surpluslabor will add to the commodity a surplus value of threeshillings—that is, of value for which no equivalent hasbeen paid. This surplus value of three shillings consti-tutes the whole fund which the employing capitalist maydivide, in whatever proportions, with the landlord andthe money-lender. The value of these three shillings con-stitutes the limit of the value they have to divideamongst them. But it is not the employing capitalist whoadds to the value of the commodity an arbitrary valuefor his profit, to which another value is added for thelandlord, and so forth, so that the addition of these arbi-trarily fixed values would constitute the total value. Yousee, therefore, the fallacy of the popular notion, whichconfounds the decomposition of a given value into threeparts, with the formation of that value by the addition ofthree independent values, thus converting the aggregate



value, from which rent, profit, and interest are derived,into an arbitrary magnitude.

If the total profit realized by a capitalist is equal to£100, we call this sum, considered as absolute magni-tude, the amount of profit. But if we calculate the ratiowhich those £100 bear to the capital advanced, we callthis relative magnitude, the rate of profit. It is evidentthat this rate of profit may be expressed in a double way.

Suppose £100 to be the capital advanced in wages. Ifthe surplus value created is also £100—and this wouldshow us that half the working day of the laborer consistsof unpaid labor—and if we measured this profit by thevalue of the capital advanced in wages, we should saythat the rate of profit amounted to one hundred percent., because the value advanced would be one hundredand the value realized would be two hundred.

If, on the other hand, we should not only consider thecapital advanced in wages, but the total capital ad-vanced, say, for example, £500, of which £400 repre-sented the value of raw materials, machinery, and soforth, we should say that the rate of profit amountedonly to twenty per cent., because the profit of one hun-dred would be but the fifth part of the total capital ad-vanced.

The first mode of expressing the rate of profit is theonly one which shows you the real ratio between paidand unpaid labor, the real degree of the exploitation (youmust allow me this French word) of labor. The othermode of expression is that in common use, and is, in-deed, appropriate for certain purposes. At all events, it isvery useful for concealing the degree in which the capi-talist extracts gratuitous labor from the workman.

In the remarks I have still to make I shall use the

DI FFER ENT PAR TS OF SUR PLUS VALUE.


word Profit for the whole amount of the surplus valueextracted by the capitalist without any regard to the di-vision of that surplus value between different parties,and in using the words Rate of Profit, I shall alwaysmeasure profits by the value of the capital advanced inwages.


CHAPTER XII.

GENERAL RELATION OF PROFITS, WAGES, AND PRICES.

Deduct from the value of a commodity the value re-placing the value of the raw materials and other meansof production used upon it, that is to say, deduct thevalue representing the past labor contained in it, and theremainder of its value will resolve into the quantity oflabor added by the workingman last employed. If thatworkingman works twelve hours daily, if twelve hours ofaverage labor crystallize themselves in an amount ofgold equal to six shillings, this additional value of sixshillings is the only value his labor will have created.This given value, determined by the time of his labor, isthe only fund from which both he and the capitalist haveto draw their respective shares or dividends, the onlyvalue to be divided into wages and profits. It is evidentthat this value itself will not be altered by the variableproportions in which it may be divided amongst the twoparties. There will also be nothing changed if in theplace of one workingman you put the whole workingpopulation, twelve million working days, for example,instead of one.

Since the capitalist and workman have only to dividethis limited value, that is, the value measured by thetotal labor of the workingman, the more the one gets theless will the other get, and vice versa. Whenever a quan-tity is given, one part of it will increase inversely as theother decreases. If the wages change, profits will changein an opposite direction. If wages fall, profits will rise;

R ELATI ON OF PR OFI TS, WAGES, AND PR I CES.


and if wages rise, profits will fall. If the workingman, onour former supposition, gets three shillings, equal to onehalf of the value he has created, or if his whole workingday consists half of paid, half of unpaid labor, the rate ofprofit will be 100 per cent., because the capitalist wouldalso get three shillings. If the workingman receives onlytwo shillings, or works only one third of the whole dayfor himself, the capitalist will get four shillings, and therate of profit will be 200 per cent. If the workingman re-ceives four shillings, the capitalist will only receive two,and the rate of profit would sink to 50 per cent., but allthese variations will not affect the value of the commod-ity. A general rise of wages would, therefore, result in afall of the general rate of profit, but not affect values.But although the values of commodities, which must ul-timately regulate their market prices, are exclusivelydetermined by the total quantities of labor fixed in them,and not by the division of that quantity into paid andunpaid labor, it by no means follows that the values ofthe single commodities, or lots of commodities, producedduring twelve hours, for example, will remain constant.The number or mass of commodities produced in a giventime of labor, or by a given quantity of labor, dependsupon the productive power of the labor employed, andnot upon its extent or length. With one degree of the pro-ductive power of spinning labor, for example, a workingday of twelve hours may produce twelve pounds of yarn,with a lesser degree of productive power only twopounds. If then twelve hours’ average labor were real-ized in the value of six shillings in the one case, thetwelve pounds of yarn would cost six shillings, in theother case the two pounds of yarn would also cost sixshillings. One pound of yarn would, therefore, cost six-



pence in the one case, and three shillings in the other.The difference of price would result from the differencein the productive powers of labor employed. One hour oflabor would be realized in one pound of yarn with thegreater productive power, while with the smaller pro-ductive power, six hours of labor would be realized inone pound of yarn. The price of a pound of yarn would, inthe one instance, be only sixpence, although wages wererelatively high and the rate of profit low; it would bethree shillings in the other instance, although wageswere low and the rate of profit high. This would be sobecause the price of the pound of yarn is regulated bythe total amount of labor worked up in it, and not by theproportional division of that total amount into paid andunpaid labor. The fact I have mentioned before thathigh-price labor may produce cheap, and low-priced la-bor may produce dear commodities, loses, therefore, itsparadoxical appearance. It is only the expression of thegeneral law that the value of a commodity is regulatedby the quantity of labor worked up in it, and the quan-tity of labor worked up in it depends altogether upon theproductive powers of the labor employed, and will, there-fore, vary with every variation in the productivity of la-bor.


CHAPTER XIII.

MAIN CASES OF ATTEMPTS AT RAISING WAGES OR RESISTING

THEIR FALL.

Let us now seriously consider the main cases in whicha rise of wages is attempted or a reduction of wages re-sisted.

1. We have seen that the value of the laboring power ,or in more popular parlance, the value of labor, is de-termined by the value of necessaries, or the quantity oflabor required to produce them. If, then, in a given coun-try the value of the daily average necessaries of the la-borer represented six hours of labor expressed in threeshillings, the laborer would have to work six hours dailyto produce an equivalent for his daily maintenance. Ifthe whole working day was twelve hours, the capitalistwould pay him the value of his labor by paying himthree shillings. Half the working day would be unpaidlabor, and the rate of profit would amount to 100 percent.. But now suppose that, consequent upon a decreaseof productivity, more labor should be wanted to produce,say, the same amount of agricultural produce, so thatthe price of the average daily necessaries should risefrom three to four shillings. In that case the value of la-bor would rise by one third, or 331/3 per cent. Eighthours of the working day would be required to producean equivalent for the daily maintenance of the laborer,according to his old standard of living. The surplus laborwould therefore sink from six hours to four, and the rateof profit from 100 to 50 per cent.. But in insisting upon arise of wages, the laborer would only insist upon getting



the increased value of his labor, like every other seller ofa commodity, who, the costs of his commodities havingincreased, tries to get their increased value paid. Ifwages did not rise, or not sufficiently rise, to compensatefor the increased values of necessaries, the price of laborwould sink below the value of labor , and the laborer’sstandard of life would deteriorate.

But a change might also take place in an opposite di-rection. By virtue of the increased productivity of labor,the same amount of the average daily necessaries mightsink from three to two shillings, or only four hours out ofthe working day, instead of six, be wanted to reproducean equivalent for the value of the daily necessaries. Theworkingman would now be able to buy with two shillingsas many necessaries as he did before with three shil-lings. Indeed, the value of labor would have sunk, butthat diminished value would command the same amountof commodities as before. Then profits would rise fromthree to four shillings, and the rate of profit from 100 to200 per cent.. Although the laborer’s absolute standardof life would have remained the same, his relative wages,and therewith his relative social position, as comparedwith that of the capitalist, would have been lowered. Ifthe workingman should resist that reduction of relativewages, he would only try to get some share in the in-creased productive powers of his own labor, and to main-tain his former relative position in the social scale. Thus,after the abolition of the Corn Laws, and in flagrant vio-lation of the most solemn pledges given during the anti-corn-law agitation, the English factory lords generallyreduced wages ten per cent. The resistance of the work-men was at first baffled, but, consequent upon circum-stances I cannot now enter upon, the ten per cent. lost

ATTEMPTS AT R AI SI NG WAGES.


were afterwards regained.2. The values of necessaries, and consequently the

value of labor, might remain the same, but a changemight occur in their money prices, consequent upon aprevious change in the value of money.

By the discovery of more fertile mines and so forth,two ounces of gold might, for example, cost no more laborto produce than one ounce did before. The value of goldwould then be depreciated by one half, or fifty per cent.As the values of all other commodities would then be ex-pressed in twice their former money prices, so also thesame with the value of labor. Twelve hours of labor, for-merly expressed in six shillings, would now be expressedin twelve shillings. If the workingman’s wages shouldremain three shillings, instead of rising to six shillings,the money price of his labor would only be equal to halfthe value of his labor, and his standard of life would fear-fully deteriorate. This would also happen in a greater orlesser degree if his wages should rise, but not propor-tionately to the fall in the value of gold. In such a casenothing would have been changed, either in the produc-tive powers of labor, or in supply and demand, or in val-ues. Nothing could have changed except the moneynames of those values. To say that in such a case theworkman ought not to insist upon a proportionate rise ofwages, is to say that he must be content to be paid withnames, instead of with things. All past history provesthat whenever such a depreciation of money occurs, thecapitalists are on the alert to seize this opportunity fordefrauding the workman. A very large school of politicaleconomists assert that, consequent upon the new discov-eries of gold lands, the better working of silver mines,and the cheaper supply of quicksilver, the value of pre-



cious metals has been again depreciated. This would ex-plain the general and simultaneous attempts on theContinent at a rise of wages.

3. We have till now supposed that the working dayhas given limits. The working day, however, has, by it-self, no constant limits. It is the constant tendency ofcapital to stretch it to its utmost physically possiblelength, because in the same degree surplus labor, andconsequently the profit resulting therefrom, will be in-creased. The more capital succeeds in prolonging theworking day, the greater the amount of other peoples’labor it will appropriate. During the seventeenth andeven the first two thirds of the eighteenth century a tenhours working day was the normal working day all overEngland. During the anti-Jacobin war, which was in facta war waged by the British barons against the Britishworking masses, capital celebrated its bacchanalia, andprolonged the working day from ten to twelve, fourteen,eighteen hours. Malthus, by no means a man whom youwould suspect of a maudlin sentimentalism, declared ina pamphlet, published about 1815, that if this sort ofthing was to go on the life of the nation would be at-tacked at its very source. A few years before the generalintroduction of the newly-invented machinery, about1765, a pamphlet appeared in England under the title,An Essay on Trade. The anonymous author, an avowedenemy of the working classes, declaims on the necessityof expanding the limits of the working day. Amongstother means to this end, he proposes working houses,which, he says, ought to be “Houses of Terror.” And whatis the length of the working day he prescribes for these“Houses of Terror”? Twelve hours , the very same timewhich in 1832 was declared by capitalists, political



economists, and ministers to be not only the existing butthe necessary time of labor for a child under twelveyears.

By selling his laboring power, and he must do so un-der the present system, the workingman makes over tothe capitalist the consumption of that power, but withincertain rational limits. He sells his laboring power inorder to maintain it, apart from its natural wear andtear, but not to destroy it. In selling his laboring powerat its daily or weekly value, it is understood that in oneday or one week that laboring power shall not be submit-ted to two days’ or two weeks’ waste or wear and tear.Take a machine worth £1000. If it is used up in ten yearsit will add to the value of the commodities in whose pro-duction it assists £100 yearly. If it is used up in fiveyears it will add £200 yearly. The value of its annualwear and tear is in inverse ratio to the quickness withwhich it is consumed. But this distinguishes the work-ingman from the machine. Machinery does not wear outin exactly the same ratio in which it is used. Man, on thecontrary, decays in a greater ratio than would be visiblefrom the mere numerical addition of work.

In their attempts at reducing the working day to itsformer rational dimensions, or, where they cannot en-force a legal fixation of a normal working day, at check-ing overwork by a rise of wages, a rise not only in pro-portion to the surplus time exacted, but in a greater pro-portion, workingmen fulfill only a duty to themselvesand their race. They only set limits to the tyrannicalusurpations of capital. Time is the room of human devel-opment. A man who has no free time to dispose of, whosewhole lifetime, apart from the mere physical interrup-tions by sleep, meals, and so forth, is absorbed by his



labor for the capitalist, is less than a beast of burden. Heis a mere machine for producing Foreign Wealth, brokenin body and brutalized in mind. Yet the whole history ofmodern industry shows that capital, if not checked, willrecklessly and ruthlessly work to cast down the wholeworking class to this utmost state of degradation.

In prolonging the working day the capitalist may payhigher wages and still lower the value of labor, if the riseof wages does not correspond to the greater amount oflabor extracted, and the quicker decay of the laboringpower thus caused. This may be done in another way.Your middle-class statisticians will tell you, for instance,that the average wages of factory families in Lancashirehave risen. They forget that instead of the labor of theman, the head of the family, his wife and perhaps threeor four children are now thrown under the Juggernautwheels of capital, and that the rise of the aggregatewages does not correspond to the aggregate surplus la-bor extracted from the family.

Even with given limits of the working day, such asthey now exist in all branches of industry subjected tothe factory laws, a rise of wages may become necessary,if only to keep up the old standard value of labor . By in-creasing the intensity of labor, a man may be made toexpend as much vital force in one hour as he formerlydid in two. This has, to a certain degree, been effected inthe trades, placed under the Factory Acts, by the accel-eration of machinery, and the greater number of workingmachines which a single individual has now to superin-tend. If the increase in the intensity of labor or the massof labor spent in an hour keeps some fair proportion tothe decrease in the extent of the working day, the work-ingman will still be the winner. If this limit is overshot,



he loses in one form what he has gained in another, andten hours of labor may then become as ruinous as twelvehours were before. In checking this tendency of capital,by struggling for a rise of wages corresponding to therising intensity of labor, the workingman only resists thedepreciation of his labor and the deterioration of hisrace.

4. All of you know that, from reasons I have not nowto explain, capitalist production moves through certainperiodical cycles. It moves through a state of quiescence,growing animation, prosperity, overtrade, crisis, andstagnation. The market prices of commodities, and themarket rates of profit, follow these phases, now sinkingbelow their averages, now rising above them. Consider-ing the whole cycle, you will find that one deviation ofthe market price is being compensated by the other, andthat, taking the average of the cycle, the market pricesof commodities are regulated by their values. Well! Dur-ing the phases of sinking market prices and the phasesof crisis and stagnation, the workingman, if not thrownout of employment altogether, is sure to have his wageslowered. Not to be defrauded, he must, even with such afall of market prices, debate with the capitalist in whatproportional degree a fall of wages has become neces-sary. If, during the phases of prosperity, when extraprofits are made, he did not battle for a rise of wages, hewould, taking the average of one industrial cycle, noteven receive his average wages, or the value of his labor.It is the utmost height of folly to demand, that while hiswages are necessarily affected by the adverse phases ofthe cycle, he should exclude himself from compensationduring the prosperous phases of the cycle. Generally, thevalues of all commodities are only realized by the com-



pensation of the continuously changing market prices,springing from the continuous fluctuations of demandand supply. On the basis of the present system labor isonly a commodity like others. It must, therefore, passthrough the same fluctuations to fetch an average pricecorresponding to its value. It would be absurd to treat iton the one hand as a commodity, and to want on theother hand to exempt it from the laws which regulatethe prices of commodities. The slave receives a perma-nent and fixed amount of maintenance; the wage laborerdoes not. He must try to get a rise of wages in the oneinstance, if only to compensate for a fall of wages in theother. If he resigned himself to accept the will, the dic-tates of the capitalist as a permanent economic law, hewould share in all the miseries of the slave, without thesecurity of the slave.

5. In all the cases I have considered, and they formninety-nine out of a hundred, you have seen that astruggle for a rise in wages follows only in the track ofprevious changes, and is the necessary offspring of pre-vious changes in the amount of production, the produc-tive powers of labor, the value of labor, the value ofmoney, the extent or the intensity of labor extracted, thefluctuations of market prices, dependent upon the fluc-tuations of demand and supply, and consistent with thedifferent phases of the industrial cycle; in one word, asreactions of labor against the previous action of capital.By treating the struggle for a rise of wages independ-ently of all these circumstances, by looking only uponthe change of wages, and overlooking all the otherchanges from which they emanate, you proceed from afalse premise in order to arrive at false conclusions.


CHAPTER XIV.

THE STRUGGLE BETWEEN CAPITAL AND LABOR AND ITS

RESULTS.

1. Having shown that the periodical resistance on thepart of the workingmen against a reduction of wages,and their periodical attempts at getting a rise of wages,are inseparable from the wages system, and dictated bythe very fact of labor being assimilated to commoditiesand therefore subject to the laws regulating the generalmovement of prices; having, furthermore, shown that ageneral rise of wages would result in a fall in the generalrate of profit, but not affect the average prices of com-modities, or their values, the question now ultimatelyarises, how far, in this incessant struggle between capi-tal and labor, the latter is likely to prove successful.

I might answer by a generalization, and say that, aswith all other commodities, so with labor, its marketprice will, in the long run, adapt itself to its value; that,therefore, despite all the ups and downs, and do what hemay, the workingman will, on an average, only receivethe value of his labor, which resolves into the value ofhis laboring power, which is determined by the value ofthe necessaries required for its maintenance and repro-duction, which value of necessaries finally is regulatedby the quantity of labor wanted to produce them.

But there are some peculiar features which distin-guish the value of the laboring power, or the value of la-bor, from the values of all other commodities. The valueof the laboring power is formed by two elements—the



one merely physical, the other historical or social. Itsultimate limit is determined by the physical element,that is to say, to maintain and reproduce itself, to per-petuate its physical existence, the working class mustreceive the necessaries absolutely indispensable for liv-ing and multiplying. The value of those indispensablenecessaries forms, therefore, the ultimate limit of thevalue of labor. On the other hand, the length of theworking day is also limited by ultimate, although veryelastic boundaries. Its ultimate limit is given by thephysical force of the laboring man. If the daily exhaus-tion of his vital forces exceeds a certain degree, it cannotbe exerted anew, day by day. However, as I said, thislimit is very elastic. A quick succession of unhealthy andshort-lived generations will keep the labor market aswell supplied as a series of vigorous and long-lived gen-erations.

Besides this mere physical element, the value of laboris in every country determined by a traditional standardof life. It is not mere physical life, but it is the satisfac-tion of certain wants springing from the social conditionsin which people are placed and reared up. The Englishstandard of life may be reduced to the Irish standard;the standard of life of a German peasant to that of aLivonian peasant. The important part which historicaltradition and social habitude play in this respect, youmay learn from Mr. Thornton’s work on Over-population,where he shows that the average wages in different agri-cultural districts of England still nowadays differ moreor less according to the more or less favorable circum-stances under which the districts have emerged from thestate of serfdom.

This historical or social element, entering into the

STR UGGLE BETWEEN CAPI TAL AND LABOR


value of labor, may be expanded, or contracted, or alto-gether extinguished, so that nothing remains but thephysical limit. During the time of the anti-Jacobin war,undertaken, as the incorrigible taxeater and sinecurist,old George Rose, used to say, to save the comforts of ourholy religion from the inroads of the French infidels, thehonest English farmers, so tenderly handled in a formerchapter of ours, depressed the wages of the agriculturallaborers even beneath that mere physical minimum, butmade up by Poor Laws the remainder necessary for thephysical perpetuation of the race. This was a gloriousway to convert the wages laborer into a slave, andShakespeare’s proud yeoman into a pauper.

By comparing the standard wages or values of labor indifferent countries, and by comparing them in differenthistorical epochs of the same country, you will find thatthe value of labor itself is not a fixed but a variablemagnitude, even supposing the values of all other com-modities to remain constant.

A similar comparison would prove that not only themarket rates of profit change, but its average rates.

But as to profits, there exists no law which determinestheir minimum. We cannot say what is the ultimatelimit of their decrease. And why cannot we fix that limit?Because, although we can fix the minimum of wages, wecannot fix their maximum. We can only say that, thelimits of the working day being given, the maximum ofprofit corresponds to the physical minimum of wages;and that wages being given, the maximum of profit cor-responds to such a prolongation of the working day as iscompatible with the physical forces of the laborer. Themaximum of profit is therefore limited by the physicalminimum of wages and the physical maximum of the



working day. It is evident that between the two limits ofthe maximum rate of profit an immense scale of varia-tions is possible. The fixation of its actual degree is onlysettled by the continuous struggle between capital andlabor, the capitalist constantly tending to reduce wagesto their physical minimum, and to extend the workingday to its physical maximum, while the workingmanconstantly presses in the opposite direction.

The matter resolves itself into a question of the re-spective powers of the combatants.

2. As to the limitation of the working day in England,as in all other countries, it has never been settled exceptby legislative interference. Without the workingmen’scontinuous pressure from without that interferencewould never have taken place. But at all events, the re-sult was not to be attained by private settlement be-tween the workingmen and the capitalists. This very ne-cessity of general political action affords the proof that inits merely economic action capital is the stronger side.

As to the limits of the value of labor, its actual settle-ment always depends upon supply and demand, I meanthe demand for labor on the part of capital, and the sup-ply of labor by the workingmen. In colonial countries thelaw of supply and demand favors the workingman.Hence the relatively high standard of wages in theUnited States. Capital may there try its utmost. It can-not prevent the labor market from being continuouslyemptied by the continuous conversion of wages laborersinto independent, self-sustaining peasants. The positionof a wages laborer is for a very large part of the Ameri-can people but a probational state, which they are sure



to leave within a longer or shorter term.6 To mend this

6 The condition prevailing in the United States at the time Marx

wrote this has long ago passed. No longer is it possible for wage labor-ers to become “independent, self-containing peasants.” Just as thewage workers today must remain wage workers if, indeed, they arelucky enough to find a master willing to pay them a wage, so the“peasants” in America remain on the verge of starvation, a few ofthem, comparatively speaking, scarcely able to exist, while large num-bers are unable to survive, their abandoned farms remaining as muteevidence that the day of the American independent farmer has gone.

In Marx’s day it was possible for the dissatisfied workers in the citiesto find relief, and independence, by going West. Their status as wagelaborers was, indeed, a “probational state,” but not so now. The dayhas come which was forecast by President Madison when he utteredthe prophetic words, viz., that the time would come in the UnitedStates when “the majority shall be without landed or other equivalentproperty and without the means or hope of acquiring it.”

According to the “Commission on Industrial Relations” (report toCongress in 1914), 2 per cent. of the “people” owned 65 per cent. of thecountry’s wealth, 33 per cent. of the “people” owned 35 per cent. of thewealth, and 65 per cent. of the people owned only 5 per cent. of thewealth. The “two per cent” are the plutocracy; the “33 per cent” aredesignated by the Industrial Commission’s report as the “middleclass”—that is to say, the lower layers of the capitalist class. The timehas come when the mass of the people are without property, “andwithout the means or hope of acquiring it.”

In the summary of the report of the Commission on Industrial Rela-tions, the commission having been created by the Act of Congress ofAugust 23, 1912, we read the following:

“Have the workers received a fair share of the enormous increase inwealth which has taken place in this country during the last twenty-five years, largely as a result of their labors? The answer is emphati-cally—NO!”

And the report goes on:“The wealth of the country between 1890 and 1912 increased from 65

to 187 billions, or 188 per cent, whereas the aggregate income of wageearners in manufacturing, mining and transportation increased be-tween 1889 and 1909 only 95 per cent, from 2516 millions in 1889, to4916 millions in 1909.

“The most exhaustive investigation ever made sowed that the in-comes of almost two-thirds of the wage earners’ families (including theearnings of father, mother and children) were less than $750 a year,and of almost one-third were less than $500.. . .



colonial state of things, the paternal British Governmentaccepted for some time what is called the modern coloni-zation theory, which consists in putting an artificial highprice upon colonial land, in order to prevent the tooquick conversion of the wages laborer into an independ-ent peasant.

But let us now come to old civilized countries, inwhich capital domineers over the whole process of pro-duction. Take, for example, the rise in England of agri-cultural wages from 1849 to 1859. What was its conse-quence? The farmers could not, as our friend Westonwould have advised them, raise the value of wheat, noreven its market prices. They had, on the contrary, tosubmit to their fall. But during these eleven years theyintroduced machinery of all sorts, adopted more scien-tific methods, converted part of the arable land into pas-ture, increased the size of farms, and with this the scaleof production, and by these and other processes dimin-ishing the demand for labor by increasing its productivepower, made the agricultural population again relativelyredundant. This is the general method in which a reac-tion, quicker or slower, of capital against a rise of wagestakes place in old, settled countries. Ricardo has justlyremarked that machinery is in constant competitionwith labor, and can often be only introduced when theprice of labor has reached a certain height, but the ap-

“These figures show conclusively that between one-half and two-thirds of these families were living below the standards of decent sub-sistence, while about one-third were living in a state of abject poverty.”

The period described here is sometimes called “the prosperity period.”If this was prosperity, what, indeed, are we to call the present periodwith upward of 16 million workers unable to secure a job! Yet there arethose who yearn for the good old days, pointing to the period coveredby the Industrial Relations Commission’s report as the model for whatshould be today!—ARNOLD PETERSEN (May Day, 1935)



pliance of machinery is but one of the many methods forincreasing the productive powers of labor. The very samedevelopment which makes common labor relatively re-dundant simplifies, on the other hand, skilled labor, andthus depreciates it.

The same law obtains in another form. With the de-velopment of the productive powers of labor the accumu-lation of capital will be accelerated, even despite a rela-tively high rate of wages. Hence, one might infer, asAdam Smith, in whose days modern industry was still inits infancy, did infer, that the accelerated accumulationof capital must turn the balance in favor of the work-ingman, by securing a growing demand for his labor.From this same standpoint many contemporary writershave wondered that English capital having grown in thelast twenty years so much quicker than English popula-tion, wages should not have been more enhanced. Butsimultaneously with the progress of accumulation theretakes place a progressive change in the composition ofcapital. That part of the aggregate capital which consistsof fixed capital, machinery, raw materials, means of pro-duction in all possible forms, progressively increases ascompared with the other part of capital, which is laid outin wages or in the purchase of labor. This law has beenstated in a more or less accurate manner by Mr. Barton,Ricardo, Sismondi, Professor Richard Jones, ProfessorRamsey, Cherbuilliez, and others.

If the proportion of these two elements of capital wasoriginally one to one, it will, in the progress of industry,become five to one, and so forth. If of a total capital of600, 300 is laid out in instruments, raw materials, andso forth, and 300 in wages, the total capital wants onlyto be doubled to create a demand for 600 workingmen



instead of for 300. But if of a capital of 600, 500 is laidout in machinery, materials, and so forth, and 100 onlyin wages, the same capital must increase from 600 to3,600 in order to create a demand for 600 workmen in-stead of 300. In the progress of industry the demand forlabor keeps, therefore, no pace with the accumulation ofcapital. It will still increase, but increase in a constantlydiminishing ratio as compared with the increase of capi-tal.

These few hints will suffice to show that the very de-velopment of modern industry must progressively turnthe scale in favor of the capitalist against the working-man, and that consequently the general tendency ofcapitalist production is not to raise, but to sink the aver-age standard of wages, or to push the value of labormore or less to its minimum limit. Such being the ten-dency of things in this system, is this saying that theworking class ought to renounce their resistance againstthe encroachments of capital, and abandon their at-tempts at making the best of the occasional chances fortheir temporary improvement? If they did, they would bedegraded to one level mass of broken wretches past sal-vation. I think I have shown that their struggles for thestandard of wages are incidents inseparable from thewhole wages system, that in 99 cases out of 100 theirefforts at raising wages are only efforts at maintainingthe given value of labor, and that the necessity of debat-ing their price with the capitalist is inherent to theircondition of having to sell themselves as commodities.By cowardly giving way in their every-day conflict withcapital, they would certainly disqualify themselves forthe initiating of any larger movement.

At the same time, and quite apart from the general



servitude involved in the wages system, the workingclass ought not to exaggerate to themselves the ultimateworking of these every-day struggles. They ought not toforget that they are fighting with effects, but not withthe causes of those effects; that they are retarding thedownward movement, but not changing its direction;that they are applying palliatives, not curing the mal-ady. They ought, therefore, not to be exclusively ab-sorbed in these unavoidable guerilla fights incessantlyspringing up from the never-ceasing encroachments ofcapital or changes of the market. They ought to under-stand that, with all the miseries it imposes upon them,the present system simultaneously engenders the mate-rial conditions and the social forms necessary for aneconomic reconstruction of society. Instead of the conser-vative motto, “A fair day’s wage for a fair day’s work!”they ought to inscribe on their banner the revolutionarywatchword, “Abolition of the wages system!”

After this very long, and I fear, tedious exposition,which I was obliged to enter into to do some justice tothe subject-matter, I shall conclude by proposing the fol-lowing resolutions:—

Firstly. A general rise in the rate of wages would re-sult in a fall of the general rate of profit, but, broadlyspeaking, not affect the prices of commodities.

Secondly. The general tendency of capitalist produc-tion is not to raise, but to sink the average standard ofwages.

Thirdly. Trades Unions work well as centers of resis-tance against the encroachments of capital. They failpartially from an injudicious use of their power. Theyfail generally from limiting themselves to a guerilla waragainst the effects of the existing system, instead of si-



multaneously trying to change it, instead of using theirorganized forces as a lever for the final emancipation ofthe working class, that is to say, the ultimate abolition ofthe wages system.

THE END

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