Part 12

As we already know, Marx became a Socialist in the year 1843. As a believer in dialectics, he knew that Socialism can only be understood by a knowledge of the movement operating in middle-class society and its developing forces. His investigations in 1843-4 led to the result that political economy forms the basis of bourgeois society. Henceforth political economy became the chief department of his studies. His comprehensive studies of French and English economists, especially Sismondi and Ricardo, and the anti-capitalist literature of England of the years 1820-40, which were connected with the Ricardian theory of value, furnished him with a wealth of suggestions and materials for the criticism of political economy, for the source and origin and development and decline of capitalism, written from the standpoint of the working class and the coming Socialistic society. Such a work is "Capital." It consists of three volumes. Only the first volume (1867) was carried through the press by Marx himself. The other two volumes he only sketched, and they were completed and published by Engels after Marx's death.

The first volume deals with the origin and tendencies of large industrial capital, with the immediate and simple process of commodity production, so far as it concerns the relations between employer and worker, the exploitation of the proletariat, wages and labour time, and the influence of modern technique on the condition of the worker. We see in the first volume the effect of the factory system in creating capital. Its chief figure is the producing, suffering, rebellious working class. In the second volume, the employer appears on the market, sells his commodities, and sets the wheels of production again in motion, so that commodities will continue to be produced. In the third volume, the realisation process of the undertakings of the capitalist class, or the movement of capital as a whole is exhibited: cost of production, cost price, total gains and their division into profit, interest and ground rent. The first volume presents the greatest difficulties. The tremendous efforts of the author to produce a masterpiece unnecessarily refined and sublimated and overloaded with learning the doctrines of value and surplus value until they attained the level of a philosophy, an example of Hegelian logic. He played with his subject like an intellectual athlete. That Marx could handle complicated economic questions in a clear, vigorous manner is shown by the third volume, which is written just as it came out of the author's head, and without the apparatus of learning subsequently erected, without the crutches of notes and polemico-philosophical excursions.

To understand "Capital" it is necessary to bear in mind that (1) Marx regarded the scientifically discovered principles as the real inner being of things, practice he regarded as the superficial appearance of things, capable of being apprehended empirically; for example, Value is the theoretical expression, Price the empirical; Surplus Value is the theoretical, and Profit the empirical expression; the appearances apprehended by experience (Price and Profit) deviate indeed from theory, but without the theory they cannot be understood; (2) he looked at the capitalist economic system as being essentially free from external hindrances and disturbances, free from invasions both by the State and the proletariat: the Labour struggles of factory protection laws of which Marx speaks in "Capital" serve rather to perfect the productive forces than to restrict the exploiting proclivities of sovereign capital.

2. Value.

The life and motion of capitalistic society appears as an infinite net of exchange operations, formed out of numerous entwined meshes.

Through the medium of money, men continually exchange the most varied commodities and services. A ceaseless buying and selling, an uninterrupted series of exchanges of things, and labour power--this constitutes the essential part of human relations in capitalistic society. An economic map of these relations, graphically displayed, would not be less confusing than an astronomical map which exhibited the manifold and intersected orbits of the heavenly bodies. And yet there must be some rule or law which operates in this seeming medley of movements; for men do not work or exchange their goods by hazard, like savages who give their entire lumps of gold or rough diamonds for a necklace of glass pearls. The English and French economists in the seventeenth, eighteenth, and nineteenth centuries, amongst whom Petty (1623-87), Quesnay (1694-1759), Adam Smith (1723-96), and Ricardo (1772-1823) were the most original, sought for the laws which regulated exchange operations, and their theories were designated by Marx as classical bourgeois economy. Following up their investigations, Marx declared: Every commodity, that is, every thing or good produced under Capitalism and brought to the market possesses a use value and an exchange value.

The use value is the utility of the commodity to satisfy a physical or mental need of its user: a commodity without use value is not exchangeable or saleable. As use values, commodities are materially different from each other; nobody will exchange a ton of wheat for a ton of wheat of the same kind, but he will for clothes.

In what measure will commodities exchange with one another? The measure is the exchange value, and this consists in the trouble and quantity of labour which the production of a commodity costs. Equal quantities of labour are exchanged with each other on the market. As exchange values, as the embodiment of human labour, commodities are essentially equal to each other, only quantitatively are they different, as different categories of commodities embody different quantities of labour. It is obvious that the quantities of labour will not be calculated according to the working methods of the individual producers, but according to the prevailing social working methods.

If, for example, hand-weaver A requires twenty hours for the production of a piece of cloth, which in a modern factory will be produced in five hours, the cloth of the hand-weaver does not therefore possess four-fold exchange value. If hand-weaver A demands of consumer B an equivalent of twenty working hours, B answers that a similar piece of cloth can be produced in five hours, and therefore it only represents an exchange value of five working hours. Thus, according to Marx, the exchange value of a commodity consists in the quantity of socially necessary labour power which its reproduction would require.

This quantity of labour is no constant factor. New inventions, improvements in labour processes, increase in the productivity of labour, etc., cause a diminution in the quantity of labour necessary for the reproduction of a commodity; its exchange value, or expressed in terms of money, its price, will therefore sink, provided that other things (demand, medium of exchange) remain equal.

Consequently, labour is the source of exchange value, and the latter is the principle which regulates exchange operations. Exchange value even measures the extent of the commodity wealth of society. Wealth may increase in volume, but decrease in value, in so far as a less quantity of socially necessary labour becomes necessary for its reproduction.

The more progressive a country is industrially and the higher the level of its civilisation, the greater is its wealth, and the smaller is the quantity of labour which must be expended on the creation of wealth. In the practical Labour politics of our times, this is expressed in higher wages and shorter working hours.

It was said above that use value is a basic condition for the exchange of the individual commodity. This does not exhaust the role of use value. The quantity of use value of which society has need determines the quantity of the exchange values to be created. If more commodities are required than society requires, the superfluous commodities have no exchange value, in spite of the labour that is expended on them.--("Capital" (German), Vol. III., 1, pp. 175-176.)

The complete realisation of exchange values or the social labour that is performed depends, as is seen, on the adaptation of supply to demand, and is a matter of organisation, of social direction.

We have noticed that the Marxian theory of value is related to that of the classical economists, but they are by no means the same thing. Apart from some improvements and definitions which Marx made, they are distinguished by the following conceptions: In the classical theory of value, the capitalist who directs production and provides with his capital the tools and raw materials of labour, markets the finished commodity, and keeps going the processes of reproduction, appears as the only creator of value: the wage worker is only one of his means of production. In the Marxian theory of value, on the other hand, the wage worker who transforms the raw materials into commodities, or removes the raw materials to the place of production, appears as the sole creator of value. Value is only created by the worker in production, and in distribution connected therewith.

3. Wages and Labour.

The worker appears to receive wages for his work. In reality he receives wages as the equivalent for the labour power expended by him, quite in accordance with the law of value, inasmuch as he receives by way of exchange as much means of sustenance as is usual and customary to replace the labour power he has expended, just as the working horse receives as much oats and hay as are necessary to maintain it capable of work.

The capitalist and the worker exchange certain quantities of commodities in proportions determined by economic laws (means of subsistence against a quantity of the commodity, labour power, of equal value, commodity for commodity, exchange value for exchange value).

As, therefore, the wages of labour signify a certain quantity of the means of subsistence, so they increase even if their money form remains unaltered with a fall in the price of the means of life, for the worker is then in the position, with his unaltered wage, to buy a greater quantity of the means of life. In the reverse case, if the prices of the means of life rise, the wages of labour fall, even if their money form remains the same as previously. This law of wages, formulated by Ricardo, was accepted by Marx, but he did not content himself with this acceptance. Ricardo regarded the capitalist world as the only possible and reasonable one, at least at the time when he wrote his "Principles," while Marx from the year 1843 adopted a critical attitude towards it, and sought to negate it. Consequently, he investigated further, and expressed himself somewhat as follows:

The capitalist theoricians believed that the wages question was disposed of when it was settled by the law of value. We know, however, that every commodity possesses not only an exchange value, but also a use value, and is bought for the sake of the latter. The use value of the commodity labour power is distinguished in a very remarkable way from the use value of all other commodities.

The use or the employment of labour power creates exchange value, and can create much more exchange value than itself possesses.

The employer can make use of labour power so long that it not only creates its own exchange value (the value of the means of subsistence), but double this. To create the value of wages, the worker needs five or six hours daily, but he is obliged to produce for the capitalist during ten or twelve hours. If the worker were independent he would only produce during one half of the working day in order to receive his means of subsistence. This period of producing Marx called "necessary labour." As he is dependent on the capitalist, the worker must not only perform "necessary labour" but also surplus labour: the worker can generally only find employment under the conditions that, besides the time needed for himself, he also works a definite number of hours for the capitalist without payment. Or, as Marx says: "The fact that half a day's labour is necessary to keep the labourer alive during the 24 hours, does not in any way prevent him from working the whole day. Therefore, the value of labour power and the value which labour creates in the labour process are two entirely different magnitudes. And this difference in the two values was what the capitalist had in view when he was purchasing labour power. The circumstance that on the one hand the daily sustenance of labour power costs only half a day's labour, while on the other hand the very same labour power can work during a whole day; that consequently the value which its use during one day creates is double what he pays for that use, this circumstance is, without doubt, a piece of good luck for the buyer, but by no means an injury to the seller."

"No injury to the seller," which is quite correct from the standpoint of Ricardo, but not from that of Marx. He often calls surplus value "unpaid labour," and says, for example, "the capitalist appropriates one half of every day's labour without payment." In other words, he takes away something without return. This is a very distinct ethical judgment.

On the other hand, it is very important that in our consideration of the wages question we have come up against the Marxian doctrine of surplus value. For this doctrine is the cornerstone of the whole economic system of Marx.

4. Surplus Value.

We have already noted that Marx followed the classical economics in his treatment of the theory of value, but improved the definition of it, and brought it to bear on wages. In doing this he laid stress on the conflict between Capital and Labour.

The beginning of this dialectical process, so far as England was concerned, was the work of the anti-capitalistic critics, who uttered their protest about 1820, or three years after the appearance of Ricardo's work. They declared, according to Ricardo, labour is the source and the measure of value. And yet according to his opinion labour is nothing and capital everything.

This should be reversed: labour must be all, and capital nothing. This literature was contemporaneous with the emergence of the English revolutionary Labour movement, from which Chartism arose at a later date. Piercy Ravenstone (1821) called capital a metaphysical (airy, impalpable) entity. Hodgskin (1827) called it a fetish, whereas they described labour as the economic reality. The expressions surplus-product and surplus-value were already known to this anti-capitalist school, with which Marx also connected himself when he set to work to elaborate his criticism of political economy. But this literature supplied him with much less material for the construction of the theory of surplus value than the formulation of the theory of value of the classical economy. Besides, while the English anti-capitalist critics, like Ravenstone, Gray, Hodgskin, and J.F. Bray merely condemned surplus value as immoral and as the source of all social wrongs, Marx used the theory of surplus value as the key to unlock the mechanism of the capitalist system and to reveal its workings, its tendencies, and its final destiny. This appears to be the real difference between the English anti-capitalist critics and Marx. In this matter he was obliged to perform most of the work himself. The question he put was no longer "What is the substance of wealth and how is it measured?" but "How is its growth and continual accretions to be explained?" Capital is that portion of wealth which is employed for the purpose of gain, of increase. Whence comes this gain, this increase? The answer is as follows: