Das Kapital

Under capitalism, production is “continuous” (711), requiring the constant replacement of machines, tools, and raw materials. Thus, Marx describes it as “reproduction” instead (711). If reproduction only provides for the capitalist and is consumed as often as it is created, Marx terms this “simple reproduction” (712).

Wages are derived from the products that the worker reproduces. For Marx, the money from wages “is merely the transmuted form of the product of his labour” (712). Marx describes this process as an “illusion” where the worker is only paid back with their own “allotted share of their own product” (713). Variable capital is, in the capitalist mode of production, the money that provides the worker with their means of subsistence.

Marx contrasts this against feudal labor, where the peasant is at least able to reproduce their own means of subsistence without it ever taking the form of money. The consumption of a worker under capitalism takes two forms. The first is “productive consumption” (717), where the worker can consume through their labor the means of production. The second is “individual consumption” (717), where the worker has to buy their means of subsistence outside work.

In the capitalist mode of production, the capitalist “profits not only by what he receives from the worker, but also by what he gives him” (717). In other words, capitalists also benefit from giving workers the means of subsistence since it provides the renewal of workers and their labor power. However, Marx explains that capitalists only want workers to consume the minimum that allows them to reproduce labor power in order to discourage workers from taking their labor power elsewhere. This is “unproductive” consumption (719).

In an example of the view of capitalists, Marx cites at length Edmund Porter, a former president of the Manchester Chamber of Commerce. When many cotton workers in Lancashire lost their jobs, Porter argued against the government granting these workers funds to emigrate to the United States or to British colonies. Porter described the workers as “machinery” and argued that if they left, it would take a generation to replace their lost expertise. Porter argued that instead the workers should be forced to work on public projects (720-23). From this, Marx concludes that capitalism forces the worker to “sell his labour-power in order to live, and enables the capitalist to purchase labour-power in order that he may enrich himself” (723).

Marx defines capital as when surplus value is invested into paying for workers and tools. When surplus value is channeled into growing capital, this is what Marx describes as the accumulation of capital. As capital accumulates, the number of wage workers also grows.

As a result of this ongoing process, Marx argues the very meaning of property has changed. Once property was based on an equal exchange of commodities between property owners. Under capitalist production, however, Marx views the meaning of property as “the right, on the part of the capitalist, to appropriate the unpaid labour of others or its product, and the impossibility, on the part of the worker, of appropriating his own product” (730).

Accordingly, Marx concludes there are three results from the capitalist understanding of property. First, “the product belongs to the capitalist and not to the worker” (731). Second, the surplus value produced by the worker is entirely the property of the capitalist as well. Third, a worker still keeps their labor power and can sell it, but only if they find another buyer. Under the capitalist mode of production, labor power itself also becomes a commodity. Also, commodity production becomes “generalized” and “impose[s] itself upon society as a whole” (733), which is made possible when commodity production is intertwined with the accumulation of capital.

Addressing the works of classical economists, Marx agrees with them on two points. The first is the hoarding of wealth is very different from capitalist accumulation. The second is that productive workers consuming surplus products “is a characteristic feature of the process of accumulation” (736). However, Marx disagrees with Adam Smith that capitalist accumulation is entirely the consumption of surplus value by workers. Instead, Marx argues that surplus value is both constant capital (means of production, i.e., machinery) and variable capital (the value of labor power, i.e., wages). The latter, specifically labor power, is a commodity consumed by capitalists, not workers.

Although Marx has so far focused on the former, capitalists divide surplus value into both capital accumulation and personal profit. Getting profits is what really drives capitalists: “[The capitalist] is fanatically intent on the valorization of value; consequences he ruthlessly forces the human race to produce for production’s sake” (739). The capitalist is driven by “an absolute drive towards self-enrichment” (739), but they are also compelled by changes in capitalist production (like technological advancements) and by competition to protect and grow capital through accumulation.

To show the historical development of this process, Marx cites the history of manufacturing in Manchester. At first, manufacturers employed young apprentices whose parents paid them a fee for their children’s employment. The manufacturers made little profit and lived in relative poverty. Enriched by wider trade networks and the development of factories, though, the manufacturers began living in luxury. At the same time, the capitalist “still thinks it necessary to reduce the worker’s wages to a minimum, ‘to keep him industrious’” (743).

Next, Marx argues against the economist Nassau W. Senior’s theory of “abstinence” (744). According to Senior, capitalist accumulation should be understood as abstinence because it is the capitalist spending money on business or manufacturing growth rather than their own comfort. Marx counters that capitalists are still able to live in great comfort simply by appropriating only a relatively small part of the surplus value. Meanwhile, workers continue to live without any such comforts.

Capitalists constantly work toward reducing the cost of labor. Marx writes, “The constant tendency of capital is to force the cost of labour back towards this absolute zero” (748). Marx gives two examples. One is the practice of some English employers to supplement very low wages with food allotments. Another is a cookbook designed to replace food for workers with cheaper alternatives (749-51). Likewise, wages have been kept well below the labor power value in cases where workers’ subsistence could be provided through welfare payments, workhouses, or charity.

In other cases, capitalists have kept the cost of wages steady while increasing the number of hours, which creates more surplus value. As industrial technology improves, becoming more efficient, and the capacity of capitalists to hire more labor grows, it becomes easier for capitalists to accumulate capital without sacrificing the money spent on their own personal luxuries.

Marx criticizes classical economists like Jeremy Bentham and James Mill for treating the amount of capital in a society as “a fixed magnitude of a fixed degree of efficiency” (758). The problem with this theory is that it purports there is a limited “wage-fund” (760), so if some workers gain more wages, that subtracts from the funds available for other workers’ wages. Instead, Marx argues that the wealth in a society is “elastic, and constantly fluctuates with the division of surplus-value into revenue and additional capital” (758).

Marx breaks down the “composition of capital” into two factors (762): value (the profits from the means of production) and labor-power value (the complete total of wages). When capital shows growth, this growth is derived from the surplus value, which is converted into the additional labor fund (the money used to pay for workers’ means of subsistence or wages and means of production). However, as capital grows, so does the “mass of the ‘labouring poor’” (765).

While capital growth may lead to increased wages for some, Marx explains this does not mean even those workers are not being exploited. Any worker who receives wages is still contributing unpaid labor to the capitalist. Also, from the capitalist’s point of view, the goal is not to provide workers with a wage that is proportional to their actual productivity; instead, it is to avoid providing too little a wage or too much of one to keep workers from becoming lazy or discouraged. Any change that goes further than a reduction of the unpaid labor workers provide would “threaten the system itself” (770). Classical economists like Adam Smith and David Ricardo hide the way this system actually works, since they wrongly assume that wages are paid strictly according to the real value of a worker’s labor.

Agreeing with Adam Smith, Marx suggests that wages grow with the accumulation of capital. However, accumulation also leads to an increase in productivity, which leads to more productivity coming out of a smaller amount of labor. Marx refers to how technological developments increase productivity as the “technical composition of capital” (773).

Technology also improves productivity as people work more efficiently in increasingly cooperative settings like factories and as “gigantic natural forces can be pressed into the service of production” (775). Accumulation also grows with the “concentration” of wealth into the hands of capitalists (776). At the same time, there is a “centralization” of capital as competition and the failure of smaller competitors leads to fewer and larger businesses (777).

With capitalist accumulation, the demand for workers grows. However, because the population of a society is larger than the total wealth of that society or its social wealth, there is always a “surplus population” (782), meaning a number of people who are not needed for capital’s growth. The surplus population includes workers who have been laid off or who were simply not taken into “the additional working population through its customary outlets” (783).

Despite their name, Marx believes the surplus population is necessary for capitalism. The surplus population provides “a disposable industrial reserve army” (784). Specifically, in times when the market is expanding, the surplus population can provide workers who can be laid off in times of economic stagnation. Due to this, industry relies on the existence of a population of “unemployed or semi-employed ‘hands’” (786).

Under capitalist accumulation and industrialization in Marx’s era, as industrialized markets expand and take over older industries, the supply of workers grows faster than the demand for workers. Further, machines allow for the replacement of skilled workers by unskilled workers and greater demands on workers’ productivity. The existence of a perpetual group of the unemployed gives employers a way to put pressure on their workers. This creates the situation where a significant number of people are left unemployed or underemployed while, at the same time, fully employed workers are overworked.

Based on these factors, Marx concludes that the classical economists are wrong when they say that wages are determined by the availability of workers. Instead, wages are determined by the demand for workers. In addition, workers will always try to move to jobs with higher wages. As a result, when the demand for workers for those higher-paying jobs decreases, wages likewise decrease.

Marx defines three types of the surplus population: floating, latent, and stagnant (794). The floating are ones who constantly move from one job to another and in and out of employment. These are the workers who are employed in workshops, factories, and mines. The latent are agricultural laborers who are left behind in the countryside as other inhabitants of rural areas migrate to the cities for better- paying industrial work. The stagnant part of the surplus population is filled with “workers in large-scale industry and agriculture who have become redundant, and especially from those decaying branches of industry where handicraft is giving way to manufacture, and manufacture to machinery” (796). They mainly work in the “domestic industry” (796), small workshops subcontracted to factories. They form the largest and most rapidly growing part of the working class, yet they are also paid the least. Marx remarks, “This law of capitalist society would sound absurd to savages, or even to civilized colonists” (797).

The lowest rank of the stagnant surplus population who live “in the sphere of pauperism” can be broken down further into three groups (797): those able to work; poor children and orphans; and the ones unable to work from old age, total exhaustion, or physical disability. The growth of social wealth generated through the capitalist means of production actually increases the size of this class and the rest of the surplus population, which also increases poverty in general. Marx believes that some classical economists, like the 18th-century Italian economist Ortes, have actually recognized this (800-01).

Marx lists a number of examples from Britain to demonstrate capitalist accumulation and its relation to poverty. In England from 1846 to 1866, Marx finds a rapid growth in productivity, an increase in profits from rents and industry, and the concentration and centralization of industry and land ownership. At the same time, poverty, debt, illness, and hunger among the poor and the working class have been on the rise.

Among the badly paid strata of the British industrial working class, official public health documents have shown that people are eating just at or below basic subsistence levels. People are also living in overcrowded, poorly designed buildings. City “improvements” in London that have seen the demolition of old houses and streets have only made affordable properties more scarce, driving up rents and the cost of property (813): “The more rapidly capital accumulates in an industrial or commercial town, the more rapidly flows the stream of exploitable human material, the more miserable are the improvised dwellings of the workers” (815).

Next, Marx considers the nomadic population. These are workers who constantly move around the country from job to job. They are exploited both as renters and as workers, often by the same employer/landlord. Then, Marx examines the effect of crises on the best-paid section of the working class. He considers two cases. The first is the economic crisis of 1866 in England. It caused thousands of workers and their families to fall into extreme poverty, forcing them to go to workhouses, depend on charity, or starve.

The second case is the situation of workers in Belgium, which in England is considered a “workers’ paradise” by economists because of a lack of government regulations like the Factory Acts and trade unions (825). However, in Belgium, workers make less in wages than soldiers, sailors, and even prisoners. Workers in Belgium have little in savings, so any increases in the prices of essential goods will lead to widespread destitution. According to official statistics, nearly half of all working-class Belgian families are considered paupers (828).

Marx then looks at the British agricultural proletariat. At the same time agricultural productivity improved with the advent of modern agriculture in the mid-18th century, rural workers’ real wages have fallen below subsistence levels, and poverty and living conditions in the countryside have worsened. Rural people have lost their homes to enclosure—the practice of privatizing land once held communally by villagers—or because they can no longer afford rent. One source cited by Marx, Professor Rogers, remarked that the condition of the English rural worker “changed for the worse to an extraordinary extent […] a serf worse fed and worse clothed” (833). In some rural parts of England, women and children have to work and some agricultural workers work in a “gang system” (850), similar to factory workers.

Finally, Marx looks at Ireland, which he describes as “merely an agricultural district of England which happened to be divided by a wide stretch of water from the country for which it provides corn, wool, cattle and industrial and military recruits” (860). By Marx’s time, Ireland had been severely depopulated from both the Plague of 1846 and from massive emigration to the United States and the British colonies. This led to a concentration of agricultural lands, which has impoverished small farmers. As a result, in Ireland, there is still a large surplus population and low real wages along with high surplus value for capitalists and high prices for workers.