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Part II : CAPITALIST MODE OF PRODUCTION
A. PRE-MONOPOLY CAPITALISM
CHAPTER VII : CAPITAL AND SURPLUS-VALUE. THE BASIC ECONOMIC LAW OF CAPITALISM
The Basis of Production Relations in the Capitalist System
With the transition from manufacture to large-scale machine industry the capitalist mode of production became predominant. In industry, in place of craft workshops and manufactories based on hand labour, factories and works appeared in which labour was equipped with complicated machinery. Largescale capitalist farms began to arise in agriculture, using comparatively developed agronomical technique and agricultural machinery. New techniques developed, new productive forms came into being, and new capitalist production-relations became predominant. An investigation of the productionrelations of capitalist society in their rise, development and decline makes up the principal content of Marx’s Capital.
The basis of the production-relations of bourgeois society is capitalist property in the means of production. Capitalist property in the means of production means the private property of the capitalists, not derived from their own labour, and used for exploitation of wage-workers. In Marx’s classic definition,
“the capitalist mode of production rests on the fact that the material conditions of production are in the hands of non-workers in the form of property in capital and land, while the masses are only owners of the personal conditions of production, of labour-power". (Marx, “Critique of the Gotha Programme", Marx and Engels, Selected Works, 1950, English edition, vol. II, p. 23.)
Capitalist production is based on wage-labour. Wageworkers are free from the ties of serfdom. But they are deprived of the means of production and compelled under threat of starvation to sell their labour-power to the capitalists. The exploitation of the proletariat by the bourgeoisie is the main feature of capitalism, and the relationship between the bourgeoisie and the proletariat is the fundamental class relationship of the capitalist system.
In countries where the capitalist mode of production prevails, alongside capitalist forms of economy more or less substantial survivals of pre-capitalist forms of economy have been preserved. “Pure capitalism" does not exist anywhere. Besides capitalist property there also exist in bourgeois countries the large-scale landed property of the landlords, together with the petty private property of simple commodity producers, peasants and craftsmen, who live by their own labour. Petty production plays a subordinate role under capitalism. The mass of petty commodity producers of town and country are exploited by the capitalists and landlords who own the factories and works, the banks, commercial institutions and the land.
The capitalist mode of production passes through two stages in its development: pre-monopoly and monopoly. The general economic laws of capitalism operate in both stages of its development. At the same time, monopoly capitalism is distinguished by a whole series of important special features, of which more later.
Let us now pass to examining the essential nature of capitalist exploitation.
Transformation of Money into Capital
Each unit of capital begins its career in the form of a certain sum of money.
Money does not in itself constitute capital. When, for instance, independent petty commodity producers exchange their commodities, money plays its part as a circulation medium but does not serve as capital. The formula of commodity circulation is: C (commodity)-M (money)-C (commodity), i.e., the selling of one commodity in order to buy another. Money becomes capital when it is used to exploit the labour of others. The general formula of capital is M-CM, i.e., buying in order to sell so as to make money.
The formula C-M-C means that one use-value is exchanged for another: a commodity producer hands over a commodity which he does not need and receives in exchange another commodity which he needs for use. The purpose of the circulation process is a use-value. In the formula M-C-M, on the contrary, the starting and finishing points of the movement coincide: at the beginning of the process the capitalist had money and at the end of it he has money. The movement of capital would be pointless if at the end of the process the capitalist had the same amount of money as at the beginning. The whole sense of the capitalist’s activity is that as the result of the operation he has more money than he had at the beginning. The purpose of the circulation process is an increase in value. Therefore the general formula of capital in its full form is: M-C-M’, with M’ standing for an increased amount of money.
Capital advanced by a capitalist, i.e., put into circulation by him, returns to its owner with a certain increment.
What is the source of this growth of capital? Bourgeois economists, in their endeavour to hide the true source of money-making by the capitalists, often assert that this increment comes about in the process of commodity circulation. This assertion is unsound. Consider the facts. If commodities and money of equal value, i.e., equivalents, are exchanged, none of the commodity owners can derive from circulation any value greater than that which is embodied in his own commodity. If sellers succeed in selling their commodities above their value, by 10 per cent, say, when they become buyers they have to pay back this 10 per cent to the sellers. Thus, what the commodity owners gain as sellers they lose as buyers. Yet in actual fact increments to capital are secured by the whole class of capitalists. Evidently, the owner of money, in order to become a capitalist, must find on the market a commodity which when consumed creates its own value and something over besides, more than it possesses itself. In other words, the owner of money must find on the market a commodity the use-value of which possesses the property of being a source of value. This commodity is labour-power.
Labour-power as a Commodity. Value and Use-value of the Commodity Labour-power
Labour-power, as the aggregate of physical and mental qualities of which a person disposes and which he puts into action whenever he produces material wealth, is a necessary element of production in any form of society. Only under capitalism, however, does labour-power become a commodity.
Capitalism is commodity production at the highest stage of its development, when labour-power too becomes a commodity. With the transformation of labour-power into a commodity, commodity production takes on a universal character. Capitalist production is based on wage-labour, and the hiring of a worker by a capitalist is nothing else than the buying and selling of the commodity labour-power: the worker sells his labour-power and the capitalist buys it.
When he has hired a worker, a capitalist has the worker’s labour-power at his free disposal. The capitalist uses this labour-power in the process of production; and that is where the increment to capital takes place.
Like every other commodity, labour-power is sold at a definite price, which is based upon its value. What is this value?
For the worker to retain his ability to work he must satisfy his need for food, clothing, footwear and housing. Satisfaction of these necessary vital requirements means restoring the vital energy-of muscles, nerves and brainswhich the worker has expended and putting him once more in a fit state to work. Furthermore, capital needs a constant flow of labour-power; for this reason the worker must be able to maintain not only himself but also his family. In this way the reproduction, i.e., the continuous renewal, of labourpower is ensured. Finally, capital needs not only unskilled but also skilled workers, able to handle complex machinery, while the acquisition of skill involves a certain outlay of labour on training. For this reason the expenses of producing and reproducing labour-power also include a definite minimum of expenditure on the training of the rising generations of the working class.
It follows from the above that the value of labour-power as a commodity is equal to the value of the means of existence which are necessary for the maintenance of the worker and his family. “The value of labour-power is determined as in the case of every other commodity, by the labour-time necessary for the production, and consequently, also the reproduction of this special article." (Marx, Capital, Kerr edition, vol. 1, p. 189)
In the course of the historical development of society both the level of worker’s customary requirements and also the means needed to satisfy these requirements have undergone changes. The level of a worker’s customary requirements varies from country to country. The special features of the historical path followed by a given country and the conditions in which the class of wage-workers was formed have much to do with determining the nature of these requirements. Climatic and other natural conditions also have a certain bearing on the workers’ requirements in respect of food, clothing and shelter. The value of labour-power includes not only the value of the consumer goods needed to restore the physical strength of the worker but also the cost of satisfying certain cultural requirements of himself and his family, engendered by the very conditions of society in which the workers live and are brought up (education of children, purchase of newspapers and books, visits to the cinema and the theatre, etc.). The capitalists try, all the time and everywhere, to reduce the material and cultural conditions of the working class to the lowest possible level.
When he begins in business, a capitalist buys everything that he needs for production: buildings, machinery, equipment, raw materials, fuel. Then he engages workers, and the production-process commences in the enterprise which he owns. When the commodity is ready, the capitalist sells it. The value of the finished commodity comprises: first, the value of the means of production expended (the raw material worked up, the fuel used, a certain part of the value of the buildings, machinery and tools); second, the new value created by the workers in the enterprise itself.
What does this new value consist of?
The capitalist mode of production presupposes a comparatively high level of productivity of labour, under which the worker needs only part of the working day to create value equal to the value of his labour-power. Let us suppose that one hour of simple average labour creates value equivalent to one dollar and the daily value of labour-power is equivalent to six dollars. In this case the worker, so as to pay for the daily value of his labour-power, would have to work six hours~ But the capitalist has bought his labour-power for the whole day, and he compels the worker to work not six hours but for an entire working day, lasting, say, twelve hours. During these twelve hours the worker creates value equivalent to twelve dollars, even though the value of his labour-power is equivalent only to six dollars.
We now see what the specific use-value of the commodity labour-power consists of for the person who buys it-the capitalist. The use-value of the commodity labour-power is its capacity to be the source of value, and withal, of more than it possesses itself.
The Production of Surplus-Value-Basic Economic Law of Capitalism
The value of labour-power and the value which is created in the process of using it are, in fact, two quite distinct magnitudes. The difference which exists between these magnitudes. is the necessary prerequisite for capitalist exploitation.
In our example, the capitalist, who has spent 6 dollars on hiring workers, obtains value created by their labour which is equivalent to 12 dollars. The capitalist recovers the capital which he originally advanced plus an increment or surplus equivalent to 6 dollars. It is this increment that constitutes surplusvalue.
Surplus-value is the value created by the labour of a wage-worker over and above the value of his labour-power and appropriated by the capitalist without payment. Thus, surplus labour is the result of the worker’s unpaid labour.
The working day in a capitalist enterprise is divided into two parts : necessary labour-time and surplus labour-time, and the labour of the wageworker into necessary and surplus labour. During the necessary labour-time the worker reproduces the value of his labour-power, and during the surplus labour- time he creates. surplus-value.
A worker’s labour, under capitalism, is a process of use by the capitalist of the commodity labour-power, or a process of extraction of surplus-value from the worker by the capitalist. The labour-process is characterised, under capitalism, by two fundamental peculiarities. First, the worker works under the control of the capitalist to whom the worker’s labour belongs. Second, not only does the worker’s labour belong to the capitalist but also the product of this labour. These peculiarities of the labour-process transform the wage-worker’s labour into a heavy and hateful burden.
The immediate aim of capitalist production is the production of surplusvalue. In accordance with this, productive labour means under capitalism only such labour as creates surplus-value. If the worker does not create surplusvalue, his work is unproductive work, useless for capital.
In contrast to the previous forms of exploitation-slave-owning and feudalcapitalist exploitation is masked. When the wage-worker sells his labour-power to the capitalist, this transaction appears at first sight to be an ordinary transaction between commodity owners, the usual exchange of a commodity against money, carried out in accord with the law of value. The transaction of buying and selling labour-power, however, is merely the outward form behind which is hidden the exploitation of the worker by the capitalist, the appropriation by the capitalist, without any equivalent, of the worker’s unpaid labour.
In order to clarify the essential nature of capitalist exploitation we will suppose that the capitalist, when he engages the worker, pays him the full value of his labour-power, determined by the law of value. It will be shown later when we examine wages that, unlike the prices of other commodities, the price of labour-power, as a rule, diverges below its value. This circumstance still further increases the exploitation of the working class by the capitalist class.
Capitalism enables the wage-worker to work, and consequently to live, only in so far as for a certain amount of his time he works gratis for the capitalist. If he leaves one capitalist enterprise, the most favourable thing that can happen to the worker will be to find himself in another capitalist enterprise, where he will be subjected to the same exploitation. When he exposed the system of wage-labour as a system of wage-slavery, Marx pointed out that whereas the Roman slave was bound by chains, the wage-worker was bound by invisible threads to his owner. This owner is the capitalist class as a whole.
Surplus-value, created by the unpaid labour of wage-workers, constitutes the common source of the unearned incomes of the various groups of the bourgeois class: industrialists, traders and bankers-and also the class of landowners.
Production of surplus-value is the basic economic law of capitalism. Analysing capitalism, Marx wrote: “Production of surplus-value is, the absolute law of this mode of production." (Marx, Capital, Kerr edition, vol. 1, p. 678.)
The essential features of this law consist in the production of surplus-value on an ever-increasing scale and the appropriation of it by the capitalists on the basis of bourgeois ownership of the means of production by means of increasing exploitation of wage-labour and the extension of production.
Capital did not invent surplus labour. Wherever society consists of exploiters and exploited, the ruling class pumps surplus labour out of the exploited classes. But unlike the slave-owner and the feudalist, who in conditions where natural economy prevailed used the greater part of the product of the surplus labour of the slaves and serf-peasants for the direct satisfaction of their needs and whims, the capitalist transforms the whole of what his wage-workers produce into money. Part of this money the capitalist spends on buying consumer goods and luxury articles, the rest he invests again, as additional capital, to bring him in further surplus-value. This is why capital displays, in Marx’s words, truly wolf-like greed for surplus labour.
The pursuit of surplus-value is the principal driving-force of the development of the productive forces under capitalism. None of the previous forms of society based on exploitation, neither slavery nor feudalism, possessed such a force, hastening forward the growth of technique.
Lenin called the doctrine of surplus-value the corner-stone of Marx’s economic theory. By disclosing in his doctrine of , surplus-value the essence of capitalist exploitation, Marx dealt a mortal blow to bourgeois political economy and its talk about the harmony of interests under capitalism, and gave the working class a spiritual weapon for overthrowing capitalism.
Capital as a Social Relation of Production. Constant and Variable Capital
Bourgeois economists call “capital" every instrument of labour and every means of production, beginning with the stones and sticks of primitive man. This definition of capital has the aim of concealing the essence of capitalist exploitation of the worker and of showing capital as some sort of eternal and unchanging condition for the existence of any human society.
In fact, the stones and sticks of primitive man served him as instruments of labour but were not capital. Neither are the tools and raw material of the handicraftsman capital, nor the Implements, seed and draught animals of the peasant who works his holding with his own labour. Means of production become capital only at a certain level of historical development, when they are the private property of a capitalist and serve as means of exploiting wagelabour. With the liquidation of the capitalist system the means of production pass into social ownership and cease to be capital. Thus, capital is not a thing but a social relationship of production which is historically transient in character.
Capital is value which, through the exploitation of wage-labour, brings in surplus-value. In Marx’s words, capital is “dead labour, that vampire-like, only lives by sucking living labour, and lives the more, the more labour it sucks." (Marx, Capital, Kerr edition, vol. 1, p. 257.) Embodied in capital is the production-relationship between the class of capitalists and the working class, consisting in the fact that the capitalists as owners of the means and conditions of production exploit wageworkers who create surplus-value for them. This production-relationship, like all the other production-relations of capitalist society, takes the form of a relationship between things, and appears as if it were a property of things themselves-the means of production-to bring in an income for the capitalist.
This is what constitutes the fetishism of capital. Under the capitalist mode of production a deceptive appearance is created, as though the means of production (or a particular sum of money for which means of production can be bought), possess by themselves the miraculous property of providing their owner with a regular unearned income.
Different parts of capital play different roles in the process of producing surplus-value.
The entrepreneur spends a certain part of his capital on erecting a factory building, on purchasing equipment and machinery, on buying raw materials, fuel and auxiliary supplies. The value of this part of capital is transferred into the newly-produced commodity in proportion as the means of production are used up or worn out in the labour process. The part of capital which exists in the form of value of the means of production does not change its magnitude during the process of production, and is therefore called constant capital.
Another part of his capital is spent by the entrepreneur on the purchase of labour-power-on hiring workers. In return for this part of the capital which he lays out the entrepreneur receives at the end of the production process a new value which has been produced by the workers in his enterprise. This new value, as we have seen) is greater than the value of the labour-power bought by the capitalist. Thus that part of the capital which is spent on the hiring workers changes its magnitude in the production process: it grows as a result of the creation by the workers of surplus-value which is appropriated by the capitalist. The part of capital which is spent on the purchase of labour-power (i.e., on hiring workers) and grows in the process of production, is called variable capital.
Marx used the Latin letter “c" to signify constant capital and “v" to signify variable capital. It was Marx who first divided capital into its constant and variable parts. Through this division the special role played by variable capital employed in the purchase of labour-power was revealed. The exploitation of wage-workers by capitalists is the real source of surplus-value.
The discovery of the two-fold character of the labour embodied in a commodity provided Marx with the key for establishing the difference between constant and variable capital and exposing the essential nature of capitalist exploitation. Marx showed that the worker by his labour simultaneously creates new value and transfers the value of the means of production into the manufactured commodity. As a definite kind of concrete labour, the worker’s labour transfers the value of the used-up means of production into his product; while as abstract labour, as expenditure of labour-power in general, the same worker’s labour creates new value. These two aspects of the labour-process are distinguished quite tangibly. For example, when the productivity of labour in a particular branch of industry is doubled, a spinner transfers to his product during the course of a working day twice as much of the value of the means of production (because he works up a quantity of cotton twice as large), but he creates only the same amount of new value as before.
The Rate of Surplus-Value
The Rate of Surplus-Value The degree of exploitation of the worker by the capitalist is expressed in the rate of surplus-value.
The rate of surplus-value is the term used for the relation between the surplus-value and the variable capital, expressed as a percentage. The rate of surplus-value shows the proportions in which the labour expended by the worker is divided into necessary and surplus labour, or in other words, what part of the proletarian’s working day is spent in replacing the value of his labour-power and what part of it he spends working gratis for the capitalist.
Marx used the Latin letter “s" to stand for surplus-value and “s"/v to stand for the rate of surplus-value. In the case quoted above the rate of surplus-value, expressed as a percentage, would be: s/v=6 dollars/6 dollars x100=100 per cent.
The rate of surplus-value is in this case 100 per cent. What this means is that in the given case the worker’s labour is divided equally into necessary and surplus labour. As capitalism develops, the rate of surplus-value grows, expressing the increase in the degree of exploitation of the. proletariat by the bourgeoisie. Still more rapidly grows the mass of surplus-value, as the number of wage-workers. exploited by capital increases.
In his article “Workers’ Earnings and Capitalists’ Profits in Russia", written in 1912, Lenin set out the following calculations, showing the degree to which the proletariat was exploited in pre-revolutionary Russia. According to the findings of an official investigation of factories and works carried out in 1908 and tending, undoubtedly, to overestimate the figures for the size of workers’ earnings and underestimate those for the size of capitalist’s profits, the workers’ wages amounted to 555.7 million roubles, while the capitalists’ profit totalled 568.7 million roubles. The total number of workers employed in the enterprises of large-scale factory industry which were investigated was 2,254,000. Thus, a worker’s average wage was 246 roubles it year, while each worker provided the capitalists, on an average, with 252 roubles of profit annually.
Thus, in Tsarist Russia the worker spent less than half of his day working for himself and more than half working for the capitalist.
Two Ways of Increasing the Degree of Exploitation of Labour by Capital.
Absolute and Relative Surplus-Value
Each capitalist tries his utmost, with the aim of increasing surplus-value, to increase the share of surplus labour extracted from the worker. The increasing of surplus-value is effected in two main ways.
Let us take for example a working day of 12 hours, of which 6 hours are necessary and 6 are surplus labour. Let us show this working day as a line on which each division is equivalent to 1 hour.
The magnitude of the surplus labour-time has grown as a result of the absolute lengthening of the working day as a whole, while the necessary labour-time has remained the same. Surplus-value produced by lengthening the working-day is called absolute surplus-value.
The second method of increasing the degree of exploitation of the workers consists in arranging, while the overall length of the working day remains unchanged, for the surplus-value received by the capitalist to increase thanks to a reduction in the necessary labour-time. The growth of the productivity of labour in the branches of industry which manufacture goods consumed by the workers, and also in those supplying implements and material for the production of these consumer goods, leads to a reduction in the labour-time needed for their production. Consequently, the value of the workers’ means of subsistence decreases; and in accordance with this the value of labour-power declines. Where formerly 6 hours had to be expended to produce a worker’s means of subsistence, now this demands, say, only 4 hours. In a case like this the working day may be depicted in the following manner:
The length of the working day has not been altered, but the amount of surplus labour-time has grown as a result of the changed proportion between necessary and surplus labour-time. Surplus-value which arises from a reduction in necessary labour-time and corresponding increase in surplus labour-time as a result of an increase in the productivity of labour is called relative surplus-value.
Both ways of increasing surplus-value lead to intensifying the exploitation of wage labour by capital; but they play a different part at different stages of the historical development of capitalism. In the first stages of the development of capitalism, when technique was at a low level and progressed relatively slowly, the most important method was the increase in absolute surplus-value. In its hunt for surplus-value capital effected a radical revolution in former methods of production, the Industrial Revolution, which gave rise to large-scale machine industry. Capitalist simple co-operation, manufacture and machine industry, discussed above, in Chapters V and VI, were successive stages in the increase in the productivity of labour by capital. In the machine period, when rapidly developing technique made it possible to raise the productivity of labour in a short time, the capitalists brought about a tremendous intensification in the degree of exploitation of the workers first and foremost by effecting an increase in relative surplus labour. At the same time they continued as before to strive for a lengthening of the working day and especially to enhance the intensity of labour. Intensifying the workers’ labour means for the capitalist the same as lengthening the working day: lengthening the working day from 10 to 11 hours or heightening the intensity of labour by one-tenth gives him the same result in either case.
An important role in the development of capitalism is played by the pursuit of extra surplus-value. It is obtained when individual capitalists introduce machines and production methods in their works which are more advanced than those used in the majority of enterprises in the same branch. In this way the individual capitalist achieves in his enterprise a higher productivity of labour compared with the average level which prevails in the relevant branch of production. As a result, the individual value of a commodity produced in this capitalist’s enterprise is lower than the social value of this commodity. As the price of a commodity is determined by its social value, however, the capitalist obtains a higher rate of surplus-value compared with the usual rate.
Let us take the following example. Let us suppose that a worker in a tobacco factory produces 1,000 cigarettes an hour and works twelve hours, during six of which he is creating value equivalent to the value of his own labour-power. If a machine is introduced in this factory which doubles the productivity of labour, this worker, working twelve hours as before, produces not 12,000 but 24,000 cigarettes. Part of the newly-created value, embodied (allowing for the value of the transferred part of the constant capital) in six thousand cigarettes i.e., the product of three hours, reimburses the factory-owner for the worker’s wages. The rest; of the newlycreated value, embodied (allowing for the value of the transferred part of the constant capital) in 18,000 cigarettes, i.e., the product of nine hours, remains with the factory-owner.
Thus, a reduction in the necessary labour-time takes place, with a corresponding lengthening of the surplus labour-time. The worker needs not even six hours but only three hours to replace the value of his own labour-power; his surplus labour has increased from six hours to nine. The rate of surplus-value has trebled.
Extra surplus-value is an excess of surplus-value above the usual rate, obtained by individual capitalists as a result of a decrease in the individual values of commodities produced in their enterprises.
The obtaining of extra surplus-value is only a temporary phenomenon for any particular enterprise. Sooner or later the majority of entrepreneurs in the same branch will introduce the new machinery, and whoever does not possess sufficient capital to do this will be ruined in the process of competition. As a result, the time socially-necessary for the production of the given commodity will be shortened and the value of the commodity reduced; and the capitalist who introduced the technical improvements earlier than the rest will cease to obtain extra surplus-value. Disappearing from one enterprise, however, extra surplus-value appears in another, where new and still more advanced machinery is being introduced.
Each capitalist aims only at his own enrichment. But the ultimate result of the separate actions of the individual entrepreneurs is the growth of technique, the development of the productive forces of capitalist society. At the same time the pursuit of surplus-value causes each capitalist to keep his technical achievements from his competitors, gives rise to trade secrets and technological hush-hush, Thus it becomes evident that capitalism sets definite limits to the development of productive forces.
The development of the productive forces under capitalism takes place in contradictory fashion. The capitalists introduce new machinery only when it will lead to an increase in surplus-value. The introduction of new machinery serves as the basis for an all-round increase in the degree of exploitation of the proletariat, lengthening of the working day and growth in the intensity of labour; the progress of technique takes place at the cost of numberless sacrifices and deprivations on the part of many generations of the working class. Thus, capitalism deals in most predatory fashion with the main productive force of society, the working class, the toiling masses.
The Working Day and its Limits. The Struggle to Shorten the Working Day
In their drive to raise the rate of surplus-value the capitalists try to lengthen the working day to its maximum length. The working day means that period of a given 24 hours during which the worker is at the enterprise and at the disposal of the capitalist. Were it possible, the employer would compel his workers to work 24 hours a day. A man needs, however, to spend a certain part of each day and night recovering his strength, resting, sleeping and eating. These needs determine the purely physical limits of the working day. Besides these, the working day also has moral limits, for the worker needs time to satisfy his cultural and social requirements.
Capital, in its insatiable greed for surplus labour, does not want to reckon with even the purely physical limits to the working day, let alone the moral ones. As Marx puts it, capital is ruthless towards the life and health of the worker. The rapacious exploitation of labour-power shortens the proletarian’s life-span and leads to an exceptional increase in the mortality rate among the working population.
In the period of the rise of capitalism the State power promulgated special laws in the interests of the bourgeoisie, for the purpose of compelling the wage-workers to work the maximum possible number of hours. In those days technique was still at a low level and the masses of peasants and craftsmen were still able to work independently, in consequence of which capital did not have a surplus of workers at its disposal. The situation changed with the spread of machine production and the growth of the proletarian population. Sufficient workers became available to capital, and they were obliged by the threat of starvation to accept enslavement to the capitalists. The need for State laws lengthening the working day declined. Capital became able to lengthen the working day to its utmost extent by means of economic compulsion. Under these conditions the working class began a stubborn struggle to shorten the working day. This struggle developed earliest in Britain.
As a result of a long struggle the British workers secured the passing in 1833 of a factory Act which restricted the labour of children under thirteen to eight hours and that of adolescents between thirteen and eighteen to twelve hours. In 1844 a law was passed restricting women’s hours of work to twelve and those of children to six and a half. In the majority of cases child labour and female labour were employed alongside that of men. For this reason a working day of twelve hours for all workers became general in enterprises affected by the factory legislation. By a law of 1847 the labour of adolescents and women was restricted to ten hours. A law of 1901 restricted working hours for adults to twelve in the first five days of the week and five and a half on Saturdays.
In proportion as the resistance of the workers grew, laws restricting the working day began to appear in other capitalist countries as well. After the passing of each law of this kind, the workers had to wage an unremitting struggle to ensure that it was implemented in practice.
A particularly stubborn struggle for legislative restriction of labour-time developed after the working class put forward as its battle-slogan the demand for an eight-hour working day. This demand was proclaimed in 1866 by the Labour Congress in America and the Congress of the First International, at Marx’s suggestion. The struggle for the eight-hour working day became an integral part not only of the economic but also of the political struggle of the proletariat.
In Tsarist Russia the first factory Acts were promulgated at the end of the nineteenth century. After the famous strikes waged by the Petersburg proletariat, the law of 1897 restricted the working day to 11˝ hours. This law was, in Lenin’s words, a forced concession, won from the Tsarist government by the Russian workers.
On the eve of the first world war a working day of 10 hours prevailed in the majority of developed capitalist countries. In 1919, influenced by the bourgeoisie’s alarm at the growth of the revolutionary movement, the representatives of a number of capitalist’ countries, meeting at Washington, concluded a convention for introducing an 8-hour day internationally. Later however, all the big capitalist States refused to ratify this convention. Nevertheless, in many capitalist countries the 8-hour working day was introduced, under the pressure of the working class. But the employers made up for the reduction in the working day by acutely increasing the intensity of labour. In a number of capitalist countries, together with an exhausting intensity of labour, a long working day prevails, especially in industries producing armaments. An excessively long working day is the lot of the proletariat in the colonial and dependent countries.
Class Structure of Capitalist Society. The Bourgeois State
The Bourgeois State Characteristic of the slave-owning and feudal modes of production was the splitting-up of society into various classes and estates, forming a complex hierarchical social structure. The bourgeois epoch simplified class contradictions and replaced the diverse forms of hereditary privilege and personal dependence by the impersonal power of money, the unrestricted despotism of capital. Under the capitalist mode of production, society splits up more and more into two great antagonistic camps, into two opposed classes, the bourgeoisie and the proletariat.
The bourgeoisie is the class which possesses the means of production and uses them to exploit wage-labour. The bourgeoisie is the ruling class in capitalist society.
The proletariat is the class of wage-workers, deprived of means of production and therefore obliged to sell its labour-power to the capitalists. Machine production enables capital to subject wage-labour to itself completely. Proletarian status becomes the lifelong lot of the class of wage-workers. By force of its economic situation the proletariat is the most revolutionary class.
The bourgeoisie and the proletariat are the basic classes of capitalist society. So long as the capitalist mode of production exists, these two classes are inseparably linked together: the bourgeoisie cannot exist and become rich without exploiting the wage-workers; the latter cannot live unless they are hired by the capitalists. At the same time the bourgeoisie and the proletariat are mutually antagonistic classes, whose interests are opposed and irreconcilably hostile to each other. The development of capitalism leads to a deepening of the gulf between the exploiting minority and the exploited masses. Besides the bourgeoisie and the proletariat there exist also under the capitalist system the classes of landlords and peasants. These classes have survived from the previous, feudal system, but have to a considerable extent changed their nature in accordance with capitalist conditions.
Landlords are, under capitalism, a class of large landowners who usually lease land to capitalist tenants or small producers-peasants; or else conduct large-scale capitalist production, using wage-labour, on the land belonging to them.
The peasantry is the class of small producers who conduct their enterprises on the basis of private ownership of the means of production and by means of backward technique and hand labour. In bourgeois countries the peasantry forms an important part of the population. The main mass of the peasantry are mercilessly exploited by the landlords, kulaks, merchants and usurers, and go down into ruin. As the process of differentiation takes effect, there are continually becoming separated off from the peasantry, on one side a mass of proletarians and on the other kulaks or capitalists.
The bourgeois State, which arose in succession to the feudal State as a result of the bourgeois revolution, is a tool in the hands of the capitalists for subjecting and oppressing the working class and the peasantry. The bourgeois State protects capitalist private property in the means of production, guarantees the exploitation of the working people and puts down their struggle against the capitalist system.
Since the interests of the capitalist class are sharply opposed to those of the overwhelming majority of the population, the bourgeoisie is obliged to conceal in every possible way the class nature of its State. The bourgeoisie tries to present this State in the guise of something above classes, existing for the benefit of the whole people, as a State of “pure democracy". But in fact bourgeois “freedom" is freedom for capital to exploit the labour of others; bourgeois “equality" is an outward show hiding the inequality which exists in fact between the exploiter and the exploited, the satiated and the hungry, between the owners of the means of production and the mass of proletarians who possess only their own labour-power. The bourgeois State holds down the masses of the people by means of its administrative apparatus, police, army, courts, prisons, concentration camps and other means of coercion. As a necessary supplement to these means of coercion, means of ideological influence exist, through which the bourgeoisie maintains its domination. To this category belong the bourgeois press, the wireless, the cinema, bourgeois science and art, and the Church.
The bourgeois State is the executive committee of the capitalist class. Bourgeois constitutions have for their aim to consolidate social systems which are acceptable and profitable to the possessing classes. The basis of the capitalist system, private ownership of the means of production, is proclaimed sacred and inviolable by the bourgeois State.
The forms assumed by bourgeois States are extremely varied, but the essence of them all is the same: all these States are dictatorships of the bourgeoisie, and try by all possible methods to protect and strengthen the system of exploitation of wage-labour by capital.
As large-scale capitalist production grows, the numbers of the proletariat increase and it becomes more and more aware of its class interests, develops politically and organises for struggle against the bourgeoisie.
The proletariat is that class of working people which is linked with the advanced form of economy, large-scale production. “Only the proletariat-by virtue of the economic role it plays in large-scale production-is capable of, being the leader of all the toiling and exploited masses." (Lenin, “State and Revolution", Selected Works, 1951, English edition, vol. II, Pt. I, p. 224) The industrial proletariat is the most revolutionary, most advanced class of capitalist society, called upon to unite around it the working masses of the peasantry and all the exploited strata of the population and to lead them in the attack upon capitalism.
(1) Under the capitalist system the basis of production relations is capitalist ownership of the means of production which is used for exploiting wageworkers. Capitalism is commodity production at its highest level of development, when labour-power also becomes a commodity. Being a commodity, labour-power under capitalism has value and use-value. The value of the commodity labour-power is determined by the value of the means of subsistence necessary for the maintenance of the worker and his family. The use-value of the commodity labour-power consists in property of being the source of value and surplus-value.
(2) Surplus-value is the value created by the labour of the worker in excess of the value of his labour-power and is appropriated by the capitalist without compensation. The production of surplus-value is the basic economic law of capitalism.
(3) Capital is value which brings in surplus-value by exploiting wageworkers. Capital embodies the social relationship between the capitalist class and the working class. The different parts of capital play different roles in the process of producing surplus-value. Constant capital is that part of capital which is spent on means of production; this part of capital does not create new value and does not change its magnitude. Variable capital is that part of capital which is spent on the purchase of labour-power; this part of capital grows as a result of the creation by the workers of surplus-value which is appropriated by the capitalists.
(4) The rate of surplus-value is the proportion of surplus-value to variable capital. It expresses the degree of exploitation of the worker by the capitalist. The capitalists raise the rate of surplus-value by two methods-by the production of absolute surplus-value and by the production of relative surplusvalue. Absolute surplus-value is surplus-value created by means of lengthening the working day or raising the intensity of labour. Relative surplus-value is surplus-value created by means of shortening necessary labour-time and correspondingly increasing surplus labour-time.
(5) The class interests of the bourgeoisie and the proletariat are irreconcilable. The contradiction between the bourgeoisie and the proletariat is the main class contradiction of capitalist society. The bourgeois State is the dictatorship of the bourgeoisie which functions as an organ for the protection of the capitalist system and for holding down the working and exploited majority of society.
The Price of Labour-power. Essential Nature of Wages
Under the capitalist mode of production, labour-power, like every other commodity, has value. The value of labour-power, expressed in money, is the price of labour-power.
The price of labour-power’ is unlike the price of other commodities. When a commodity producer sells cloth, say, in the market, the sum of money which he receives is simply the price of the commodity which he has sold. When a proletarian sells his labour-power to a capitalist and obtains a certain sum of money in the form of wages, that sum of money appears not as the price of the commodity labour-power but as the price of labour.
This comes about for the following reasons. First, the capitalist pays the worker his wages after the worker has expended his labour. Second, wages are fixed either in accordance with the amount of time worked (in hours, days, weeks) or in accordance with the quantity of product produced. Let us take our previous example. Let us suppose that the worker works 12 hours a day. During 6 hours he produces the value of 6 dollars, equal to the value of his labour-power. In the remaining 6 hours he produces the value of 6 dollars, which is appropriated by the capitalist as surplus-value. As the employer has hired the proletarian for a full working day, he pays him 6 dollars for the whole 12 hours of his labour. Thus a false impression is created, as though wages were the price of labour and 6 dollars were full payment for the whole of the I2-hour working day. In fact, the 6 dollars are/only the value of one day’s labour-power, whereas the proletarian’s labour has created value equal to 12 dollars. If wages at the given enterprise are worked out in relation to the product turned out, it looks as though the worker is paid for the labour expended in every unit of the commodity he has made, i.e., as above, that the whole of the labour expended by the worker has been fully paid for.
This deceptive appearance is not an accidental delusion. It arises from the very conditions of capitalist production, under which exploitation is concealed, slurred over and the relations between the employer and the wage-worker appear in distorted form as relations between equal commodity producers.
In reality the wages of the wage-worker are not the value or price of his labour. If we suppose that labour is itself a commodity and has value, then the magnitude of this value must be measured by some means. Evidently, the magnitude of “the value of labour", as of any other commodity, must be measured by the amount of labour contained in it. Such a supposition creates a vicious circle: labour is measured by labour.
Further, if a capitalist were to pay a worker “the value of his labour", i.e., were to pay for his labour to the full extent, there would then be no source for the capitalist’s wealth, i.e., no surplus-value, or, in other words, the capitalist mode of production could not exist.
Labour is the creator of the value of commodities, but labour is not itself a commodity and has no value. What in everyday life is called “the value of labour" is in reality the value of labour-power.
The capitalist buys on the market not labour but a special commoditylabour- power. The use of labour-power, i.e., the expenditure of the energy of the worker’s muscles, nerves and brain, is the process of labour. The value of labour-power is always less than the value newly created by the worker’s labour. Wages are the payment for only part of the working day, namely, for necessary labour-time. But in so far as wages take the form of payment for labour the impression is created that the whole of the working day is fully paid for. For this reason Marx calls wages in bourgeois society the transmuted form of the value or price of labour-power.
“Wages are not what they appear to be, namely the value, or price, of labour, but only a masked form for the value, or price, of labour-power." (Marx, “Critique of the Gotha Programme," Marx and Engels, Selected Works, 1950, English edition, vol. II, p. 27.)
Wages are the monetary expression of the value of labour power, its price, outwardly appearing as the price of labour.
Under slavery no buying and selling of labour-power takes place between slave-owner and slave. The slave is the property of the slave-owner. It therefore seems as though the whole of the slave’s labour is given for nothing, that even that part of his labour which replaces what has been spent on his upkeep is unpaid labour, labour for the slave-owner. In feudal society the necessary labour of the peasant on his own holding and his surplus labour on the landlord’s demesne are distinctly separated in time and space. Under the capitalist system even the unpaid labour of the wage-worker appears to be paid for.
Wages conceal all traces of the division of the working day into necessary and surplus labour-time, into paid and unpaid labour, and so cover up the relation of capitalist exploitation.
Basic Forms of Wages
The basic forms of wages are: (1) time wages and (2) piece wages (payment by the job).
Time wages are that form of wages under which the magnitude of a worker’s wages depends on the time which he works-in hours, days, weeks or months. In accordance with these units of time we distinguish payment by the hour, by the day, by the week, by the month.
With one and the same magnitude of time wages, the actual earnings of a worker can differ, depending on the length of the working day. The price of one working hour serves as the measure of payment to the worker for the labour expended by him in a unit of time. Although, as has been shown labour itself has no value, nor, consequently, any price, the conventional name “price of labour" is used to define the size of a worker’s earnings. The unit of measurement of the “price of labour" is provided by the payment for the labour of one working hour, or the price of one hour’s work. Thus if the average working day lasts 12 hours, and the average per-day value of labour-power is equivalent to 6 dollars, then the average price of a working hour (600 cents÷12) will be 50 cents.
Time wages enable the capitalist to intensify the exploitation of the worker by way of lengthening the working day-to lower the price of a working hour, while leaving the wages per day, week or month unchanged. Let us suppose that the daily rate of payment remains as before, 6 dollars, but the working day is increased from 12 to 13 hours. In such a case the price of 1 working hour (600 cents÷13) will be reduced from 50 to 46 cents. Under pressure of the workers’ demands the capitalist is sometimes obliged to raise the daily (and, accordingly, the weekly and monthly) rate of wages, but the price of 1 working hour may nevertheless remain unchanged or even decline. Thus, if the daily wage is raised from 6 dollars to 6 dollars 20 cents, while the working day is increased from 12 to 14 hours, the price of a working hour is thereby reduced (620 cents÷14) to 44 cents.
The growth in the intensity of labour means in practice also a fall in the price of a working hour, since the payment remains the same for a greater output of energy, equivalent to a lengthening of the working day. As a result of the fall in the price of a working hour the proletariat, in order to exist, is obliged to agree to a further lengthening of the working day. Both the lengthening of the working day and the unbounded intensification of labour lead to increased expenditure of labour-power and to its being undermined.
The lower the payment for each hour, the greater the amount of labour or the longer the working day that is needed for the worker to secure even a low wage. From another aspect, the lengthening of the working period brings in its turn a lowering of the payment for a working hour.
The capitalist makes use in his own interests of the circumstance that, with a lengthening of the working day or an increase in the intensity of labour, the payment for 1 hour labour is reduced. When conditions are favourable for the sale of commodities, he lengthens the working day, introduces overtime, i.e., work beyond the established duration of the working day. If market conditions are unfavourable and the capitalist is forced temporarily to reduce the extent of his production, he reduces the working day and introduces hourly rates of payment. Hourly rates, when the working day or working week are incomplete, sharply reduce earnings. If, In our example,. the working day be shortened from 12 to 6 hours while the rate of payment for labour remains, as before, 50 cents per hour, then the daily earnings for a worker amount in all to 3 dollars, i.e., they will be half the daily value of labour-power. Thus, the worker loses in earnings not only when the working day is lengthened beyond the usual duration but also when he is obliged to work short time.
“The capitalist can now wring from the labourer a certain quantity of surplus labour without allowing him the labour-time necessary for his own subsistence. He can annihilate all regularity of employment and, according to his own convenience, caprice and the interest of the moment make the most enormous overwork alternate with relative or absolute cessation of work." (Marx, Capital, Kerr edition, vol. 1, p. 597.)
With time wages the size of the worker’s earnings bear no direct relation to the degree of intensity of his labour: if the intensity of labour is increased, time wages are not raised and in fact the price of a working hour falls. So as to intensify exploitation the capitalist employs special overlookers who see that the workers obey capitalist labour discipline and intensify this discipline still further.
Time wages were widespread in the early stages of the development of capitalism, when the employer, meeting as yet little organised resistance from the workers, was in a position to increase surplus-value by lengthening the working day. Time wages have been retained, however, even in the highest phase of capitalism. In a number of cases they offer several advantages to the capitalist: through speeding up the movement of the machinery the capitalist obliges the workers to work still more intensively, without increasing their wages.
Piece wages (payment by results) is that form of wages under which the size of the worker’s earnings depends on the quantity of articles or separate parts which he produces, or the number of operations he completes, in a given unit of time. Under time wages payment for labour expended varies with its length, under piece wages it vanes with the amount of articles produced or operations completed, each of which is paid for at a definite rate.
In fixing the rate, the capitalist takes into account, first, the time wages of the worker per day and, second, the amount of articles or parts which the worker produces in the course of a day; usually he fixes the production quota at the highest level attained by a worker. If the average daily wage in the given ranch of production under time wages amounts to 6 dollars, and the quantity of articles of a particular kind produced by a worker is 60, then the piece-rate for an article or part will be 10 cents. In fixing the piece-rate the capitalist strive that the hourly (daily, weekly) earnings of a worker should not be higher than under time wages. Thus, piece wages are fundamentally a modified form of time wages.
Piece wages, even more than time wages, give rise to the deceptive appearance that the worker is selling the capitalist not labour-power but labour, and is receiving full payment for his labour in accordance with the amount he produces.
Capitalist piece-wage systems lead to continually greater intensification of labour. In addition they help the entrepreneur in the matter of supervision of the workers. The degree of intensity of labour is here controlled by the quantity and quality of the product which the worker must make in order to obtain the means of subsistence which he needs. The worker is compelled to increase his output by working more intensively. But as soon as a more or less considerable section of the workers achieve the new, heightened level of intensity of labour, the capitalist lowers the piece-rates. If, in our example, the piece-rate is halved, say, the worker is obliged, in order to keep his earnings at their former level, to work twice as hard, i.e., either to work longer hours or to work at still greater intensity, so that in one day he can produce not 60 but 120 parts. “The worker tries to keep up the amount of his wages by working more, whether by working longer hours or by producing more in one hour.... The result is that the more he works, the less wages he receives." (Marx, “Wage Labour and Capital", Marx and Engels, Selected Works, 1950, English edition, vol. 1, p. 95) This is the most important peculiarity of piece wages under capitalism. Time and piece forms of wages are often in force at the same time in one and the same enterprise. Under capitalism both of these forms of wages are only different ways of intensifying the exploitation of the working class.
Capitalist piece-work provides the basis for the sweating systems of wages which are applied in capitalist countries.
Sweating Systems of Wages
The most important feature of capitalist piece-work is the unbounded intensification of work, which drains the worker’s entire strength. At the same time the wages paid do not compensate for this increased expenditure of labour-power. Beyond the limits of a certain length and intensity of work, no additional payment can avert direct destruction of labour-power.
As a result of the use in capitalist enterprises of exhausting methods of organising labour, towards the end of the working day an overstrain of the worker’s muscular and nervous strength usually makes itself felt, which leads to a falling-off in the productivity of labour. In his pursuit of increased surplusvalue the capitalist resorts to various sweating systems of wages, so as to achieve a high intensity of labour throughout the entire length of the working day. Under capitalism it is such aims as these that are served by the so-called “scientific organisation of labour". Widespread forms of such organisation of labour, with use of wage-systems which are extremely exhausting in their effect on the worker, are Taylorism and Fordism, underlying both of which is the principle of raising the intensity of labour to the maximum.
The essence of Taylorism (the system is named after its deviser, the American engineer F. Taylor) is as follows. The strongest and most dexterous workers in the enterprise are picked out. They are obliged to work at their maximum intensity. Their execution of each separate operation is timed in seconds and fractions of a second. On the basis of the data obtained by this time-study a production regime and time norms are laid down for the whole mass of the workers. When he overfulfils the norm (the “job"), the worker receives a small addition to his daily wage-a bonus; if the norm is not fulfilled the worker is paid at a lower rate. Capitalist organisation of labour in accordance with Taylor’s system sucks out all the worker’s strength; and transforms him into an automaton mechanically performing the same movements over and over again
V. I. Lenin gives an actual example (the work of loading pig-iron on to a truck), where with the introduction of Taylor’s system into the execution of one operation alone a capitalist was able to reduce the number of workers from 500 to 140, i.e., to divide it by 3.6; by monstrously intensifying the work, the daily norm of a worker engaged in loading was raised from 16 to 59 tons, i.e., multiplied by 3.7. While a worker now carried out in one day work which previously he had taken three to four days to carry out, his daily wages normally increased (and then only for a time) by only 63 per cent in all. In other words, with the introduction of this system of payment the daily earnings of a worker were divided, in fact, if one compares them with the labour expended, by 2.3. “As a result," wrote Lenin, In those same 9-10 hours of work three times as much labour is extorted from the worker, all his strength is ruthlessly exhausted, every drop of the wage-slave’s nervous and muscular energy is sucked out of him at treble speed. Does he die sooner than he would have done? There are many others at the gate! ... “ (Lenin, “A ‘Scientific’ System of Squeezing Out Sweat", Works, Russian edition, vol. XVIII, p, 556.)
Lenin called such ways of organising the worker’s labour and wages a “scientific" system of squeezing out sweat.
The system of organising labour and wages introduced by the American “automobile king" H. Ford and other capitalists (the, system of Fordism) has the same aim, that of extracting the largest possible amount of surplus-value by maximising the intensity of labour. This it achieves by continually greater speeding-up of the conveyor belts and introduction of sweating systems of wage-payment. The simplicity of the work operations performed by a worker at one of Ford’s conveyor belts makes it possible to use the labour of unskilled workers on a wide scale and to fix a low rate of wages for them. The tremendous intensification of labour is not accompanied by any increase in wages or reduction of working hours. The result is that the worker quickly becomes worn out and transformed into a sick man; he is dismissed from the works ,as unfit and falls into the ranks of the unemployed.
Intensified exploitation of the workers is attained also by other systems of organising labour and wages which are variants of Taylorism and Fordism. Among these is the Gantt system (U.S.A.). Unlike Taylor’s piece-work system, the Gantt system is one of time-bonuses. The worker is assigned a certain “job" and a very low guaranteed payment is fixed for a unit of working time, regardless of fulfilment of the norm. If he fulfils the norm the worker is paid a small addition to his guaranteed minimum-a “bonus". The Halsey system (U.S.A.) is based on the principle of bonus payments for “time saved" supplementing an “average wage" per hour’s work. Under this system, for example, when the intensity of labour is doubled, for every hour of “saved" time a “bonus" is paid, amounting to about a third of the hourly rate. By this method, the more intensive the worker’s labour the greater the degree to which his wages fall in relation to the labour it he expends. The Rowan system (Britain) is based on the same principles.
A method of increasing surplus-value which is grounded in deception of the workers is socalled “profit-sharing". On the pretext of giving the workers an interest in raising the profitability of the enterprise, the capitalist lowers the workers’ wages and at their expense sets up a fund for “distribution of profits among the workers". Later on, towards the end of the year, the worker is paid, under the name of “profit", what is in fact part of the wages which had previously been kept back from him. In the end the worker who is “sharing the profits" receives in fact less than the usual wages. For the same purpose shares in an enterprise are distributed among the workers.
The capitalists’ tricks in all kinds of wage systems are aimed at extracting as much surplus-value as possible from the workers. The employers use such methods in order to befuddle the workers’ minds with an imaginary interest in intensifying labour, reducing expenditure on wages per unit of production and raising the profits of the concern. In this way the capitalist strives to weaken the proletariat’s resistance to the offensive of capital, to induce the workers to refuse to join trade unions or take part in strikes and to bring about a split in the labour movement.
Behind all the various forms of capitalist piece-work the essence remains the same: as the intensity and productivity of labour is raised the workers’ earnings in fact fall while the capitalist’s income increases.
Nominal and Real Wages
In the early stage of capitalism’s development payment of wages to the workers in kind was widespread: the worker received shelter, some meagre food and a little money.
Wages in kind survive to some extent even into the machine period of capitalism. They existed, for instance in the extractive and textile industries of pre-revolutionary Russia. Wages in kind are widespread in capitalist agriculture where the labour of poor peasants is used, in certain branches of industry in the capitalist countries, and in the colonial and dependent countries. The forms in which the worker is paid in kind vary. The capitalists place the workers in a position where they are forced to take food on credit from the factory shop, to lease a dwelling near the mine or on the plantation on oppressive terms fixed by their employer, etc. Under methods of wage-payment in kind the capitalist exploits the wageworker not only as a seller of labour-power but also as a consumer.
Money wages are characteristic of the capitalist mode of production in its developed form.
Nominal wages must be distinguished from real wages.
Nominal wages are wages expressed in money; the sum of money which the worker receives from the sale of his labour-power to the capitalist.
Nominal wages do not in themselves give any idea of the actual level of payment received by the worker. For example, nominal wages may remain unchanged, but if at the same time taxes and the prices of consumer goods rise, the worker’s actual wages fall. Nominal wages may even increase but if the cost of living rises to a greater extent in the same period of time, then in fact wages have fallen.
Real wages are wages expressed in terms of the worker’s means of subsistence; they show how many and what kinds of consumer goods and services a worker can buy with his money wages. To determine a worker’s real wage, one must start the size of his nominal wages, the level of prices of goods, the level of rents, the burden of taxes borne by the workers, the circumstances that some days he may receive no wages owing to short-time working, and the number of unemployed and semi-unemployed who are supported by the’ working class. One must also take into account the length the working day and the degree of intensity of labour.
In determining the average level of wages bourgeois statistics distort reality: they include in wages the incomes of the upper administrative groups of the industrial and financial bureaucracy (managers of enterprises, bank directors, etc.); include only the wages of skilled workers in the category of wages while excluding from it the numerous stratum of poorly-paid, unskilled workers and the agricultural proletariat; ignore the huge army of unemployed and semi-unemployed, the rise in the prices of mass consumer goods and in taxation; and resort to other methods of falsification so as to embellish the situation of the working class under capitalism.
Even falsified bourgeois statistics cannot, however, hide the fact that wages under capitalism, owing to their low level, the raising of the cost of living and the growth of unemployment fail to guarantee a living wage to the majority of the workers.
In 1938 some bourgeois economists in the U.S.A. worked out, using extremely modest standards, a living wage for a worker’s family consisting of four persons: 2,177 dollars a year. Yet in 1938 the average wage per head of an industrial worker in the U.S.A. amounted to 1,176 dollars, i.e., considerably less than half of his living wage; if the unemployed were brought into the calculation, the figure came to 740 dollars, i.e., only a third of this subsistence minimum. In 1937 a quite humble living wage for an average worker’s family in Britain was defined by some bourgeois economists at 55s. a week. Official figures showed that 80 per cent of the workers in the coal industry, 75 per cent of the workers in the extractive industries other than coal mining, and 57 per cent of municipal workers in Britain were being paid less than this subsistence minimum.
Decline of Real Wages under Capitalism
On the basis of his analysis of the capitalist mode of production, Marx established the following fundamental law relating to wages. “The general tendency of capitalist production is not to raise but to sink the average standard of wages." (Marx, “Wages, Price and Profit", Marx and Engels, Selected Works, 1950, English edition, vol. I, p. 405.)
Wages as the price of labour-power, like the price of any other commodity, are determined by the law of value. The prices of commodities vary in capitalist economy both above and below their value, under the influence of supply and demand. But unlike the prices of other commodities the price of labour-power, as a rule, tends to fall below its value.
This tendency of wages to fall below the value of labour-power is due above all to the existence of unemployment. The capitalist tries to buy labour-power as cheap as he can. When there is unemployment the supply of labour-power exceeds the demand for it. The commodity labour-power differs from others in that the proletarian cannot put off selling it. So as not to die of hunger, he is compelled to sell his labour-power on whatever terms the capitalist offers him. In periods of complete, or partial unemployment the worker is either entirely without wages or else their level falls sharply. When there is unemployment this intensifies competition among the workers. Taking advantage of this, the capitalist pays the worker wages which are less then the value of his labourpower. In this way the wretched situation of the unemployed; who form part of the working class, has an effect on the material position of the workers in employment, reducing the level of their wages.
Furthermore, the use of machinery provides the capitalist with extensive opportunities of substituting female and child labour for men’s. The value of labour-power is determined by the value of the means of subsistence which are needed by a worker and his family. When, therefore, the worker’s wife and children are drawn into production, the worker’s wages fall and the entire family now receives approximately the same amount as previously was received by the head of the family only. This by itself means that the working class as a whole is being exploited still more intensely. In capitalist countries women workers doing the same work as men are paid considerably less wages.
Capital extorts surplus-value by unrestrainedly exploiting child labour. The wages of children and youths are much lower than those of adult workers in all capitalist and colonial countries.
The average wage of a woman worker is lower than the average wage of a male worker by 41 per cent in the U.S.A. (1949),46 per cent in Great Britain (1951), and 42 per cent in Western Germany (1951). The difference is even more marked in colonial and dependent countries.
In the U.S.A. in 1949, according to conservative figures, more than 3,300,000 of the wageworkers were children and youths. The working day for children and youths is very long; thus, in starch works and in canning and meat factories, laundries and dry-cleaning workshops, children work 12-13 hours a day.
In Japan the practice of selling children for work in the factories is widespread. Child labour was employed extensively in Tsarist Russia. A considerable section of the workers in textile and several other kinds of enterprise in Russia was made up of children aged eight to ten.
The exploitation of child labour by capital assumes particularly cruel forms in colonial and dependent countries. In the textile and tobacco factories of Turkey children of seven to fourteen work a full working day, the same as adults.
The low wages of women workers and the exploitation of child labour brings in its train a tremendous growth of sickness and child mortality and has a baneful effect on the upbringing and education of the rising generation.
The decline in the workers’ real wages is caused also by the fact that, as capitalism develops, the position of a substantial section of the skilled workers deteriorates. As already mentioned, the expenses of a worker’s training enter into the value of his labour-power. A skilled worker creates more value, including surplus-value, in a given unit of time, than an unskilled worker. The capitalist is obliged to pay for skilled labour more than he pays for unskilled. But as capitalism develops, with the growth of industrial technique, while on the one hand there arises a demand for highly-skilled workers, able to control and operate complicated mechanisms, on the other hand many workoperations are simplified and the labour of a considerable section of the skilled workers becomes redundant. Considerable sections of the skilled workers lose their skill, are pushed out of employment and are forced to take up unskilled work which is paid a great deal less.
The rise in the cost of living and the fall in the level of real wages connected with this are caused also by the rise in prices of mass consumer goods. Thus, in France, on account of inflation, retail prices of foodstuffs stood in 1938 at a level more than seven times as high as in 1914.
A considerable part of the worker’s wages is absorbed by rent. In Germany between 1900 and 1930 the average rent grew by 69 per cent. According to the figures of the International Labour Office, in the 1930’s the workers spent on rent heating and lighting, in the U.S.A., 25 percent of their family budgets, in Britain 20 per cent and in Canada 27 per cent. In Tsarist Russia workers’ expenditure on housing came to as much as a third of their wages.
Taxes which fall on the working people make a big deduction from their wages. In the principal capitalist countries in the post-war period direct and indirect taxes absorb as much as a third of the wages of a working-class family.
One widespread method of reducing wages was the system of fines. In Tsarist Russia, until the promulgation of the law on fines (1886), which somewhat restricted the arbitrary behaviour of the factory owners, deductions from wages in the shape of fines amounted in certain cases to as much as half the monthly earnings of a worker. A worker was fined on every kind of pretext: for “unsatisfactory work", for “breach of regulations", for talking, for taking part in demonstrations, etc. Fines serve not only as a means of strengthening capitalist labour discipline but also as a source of additional income for the capitalist.
Another factor in the decline of the workers’ real wages is the exceptionally low wages received by the agricultural proletariat. The great army of surplus labour-power in the countryside exerts a constant downward pressure on the wage-level of the employed workers.
Thus, for example, during the period 1910-39 the average monthly wage of an agricultural worker in the U.S.A. varied between 28 to 47 per cent of the wage of an industrial worker. The situation of the agricultural workers in Tsarist Russia was an exceptionally hard one. For a working day of 16-17 hours the average daily wage drawn by a seasonal agricultural worker in Russia in 1901-10 amounted to 69 kopeks, and the miserable pay which he thus obtained during ploughing, sowing and harvest periods had to support him during the remaining months of the year when he was completely or partially unemployed.
So, with the development of the capitalist mode of production the real wages of the working class suffer a reduction.
In 1924 the real wages of the German workers were 75 per cent of what they had been in 1900, and in 1935 they were 66 per cent. In the U ,S.A. the average nominal wages of the workers (unemployed included) grew by 68 per cent between 1900 and 1938; in the same period, however, the cost of living rose to 2.3 times its height at the beginning of the century, so that the workers’ real wages fell by much as 74 per cent between these years. In France, Italy and Japan, not to speak of the colonial and dependent countries, the decline real wages in the nineteenth to twentieth centuries was considerably greater than in the U.S.A. In Tsarist Russia in 1913 the real wages of industrial workers had fallen by not less than 90 percent from the level in 1900.
The value of labour-power is not identical in all countries.
The conditions which determine the value of labour-power vary from one country to another. This, fact gives rise to national differences in wages. Marx wrote that, in making comparisons between wages in different countries, one must take into account all the factors which determine variations in the magnitude of the value of labour-power: the historical conditions under which the working class was formed and its established level of requirements, the cost of training a worker, the part played by the labour of women and children, the productivity of labour, the intensity of labour, the prices of consumer goods, etc.
An especially low level of wages is to be observed in colonial and dependent countries. In carrying out its policy of enslaving; and systematically plundering the colonial and dependent countries, capital takes advantage of the great surplus of working; hands available in those countries and pays for labourpower at very much less than its value. In this connection the worker’s nationality is taken into account. Thus, for instance, whites and Negroes doing the same work are paid at different rates. In South Africa the average wage of a Negro worker is only one-tenth that of a white worker. In the U.S.A. Negroes in the cities are paid two-fifths as much, and in agriculture hardly one-third as much as whites who do the same work.
The bourgeoisie creates, at the expense of the lowered wages of the basic mass of the workers and the plunder of the colonies, privileged conditions for a relatively small stratum of well-paid workers. The bourgeoisie uses the socalled aristocracy of labour formed from these well-paid strata, including a section of trade union officials and co-operative bureaucrats, some of the foremen, etc., for the purpose of splitting the labour movement, and poisoning the consciousness of the basic mass of proletarians with preachings about class peace and the unity of interests between exploiters and exploited.
The Struggle of the Working Class to Raise Wages
In each country a certain level of wages is established on the basis of the law of the value of labour-power, as a result of a fierce class struggle between the proletariat and the bourgeoisie.
The extent to which wages can diverge from the value of labour-power has its limits.
The minimum limit of wages under capitalism is fixed by purely physical conditions: the worker must have that quantity of means of subsistence which he needs absolutely in order to live and reproduce his labour-power. “If the price of labour-power falls to this minimum it falls below its value since under such circumstances, it can be maintained and developed only in a crippled state. (Marx, Capital, Kerr edition, vol. 1, p. 192.) When wages fall below this limit there occurs tin accelerated process of direct physical destruction of labour-power and dying-off of the working population. This finds expression in a shortening of the average expectation of life, a fall in the birth rate and an increase in the mortality rate among the working population, both in the developed countries and also and especially, in the colonial countries.
The maximum limit of wages under capitalism is the value of labour-power. The degree to which the average level of wages approximates to this limit is determined by the relation of class forces as between proletariat and bourgeoisie.
The bourgeoisie endeavours, in its striving for greater profits, to reduce wages below the physical minimum limit. The working class fights against cuts in wages and for increased wages, for the establishment of a guaranteed minimum wage, for the introduction of social insurance, and for a shorter working day. In this struggle the working class is opposed by the capitalist class as a whole and by the bourgeois State.
The stubborn struggle waged by the working class to raise wages had its beginning along with the rise of industrial capitalism. It developed first in Britain, and later spread to the other capitalist countries and to the colonies.
As the proletariat takes shape as a class the workers come together in trade unions for the purpose of successfully conducting their economic struggle. The result of this is that the employer finds himself opposed no longer by individual proletarians but by an entire organisation. With the development of the class struggle, besides local and national trade unions there came into being international associations of trade Unions. The trade unions provide a school of class struggle for the broad masses of the workers.
On their part, the capitalists come together in employers’ associations. They bribe venal and reactionary trade union officials, organise strike-breaking, split the workers’ organisations, and use the police, troops, courts and prisons to suppress the labour movement.
One of the effective methods of struggle used by the workers under capitalism to secure increased wages, shorter working hours and improved conditions of work is the strike. As class contradictions become more acute and the working-class movement becomes better organised in the capitalist and colonial countries, many millions of workers are drawn into strike struggles. When workers struggling against capital show determination and stubbornness, economic strikes force the capitalists to accept the strikers’ terms.
It is only as a result of the unremitting struggle of the working class for its vital interests that the bourgeois States are compelled to promulgate laws on minimum wages, on reduction of working hours and on restriction of child labour.
The economic struggle of the proletariat is of great importance: as a rule, trade unions under steadfast class leadership put up a successful resistance to the employers. The struggle of the working class is a factor which to a certain extent restrict the fall in wages. But the economic struggle of the working class cannot abolish the system of capitalist enslavement of the working people and deliver the workers from exploitation and want.
While recognising the great importance of the economic struggle of the working class against the bourgeoisie, Marxism-Leninism teaches that this struggle is directed merely against the consequences of capitalism and not against the root cause of the oppressed situation and poverty of the proletariat. This root cause is the capitalist mode of production itself.
Only through revolutionary political struggle can the working class abolish the system of wage slavery, the source of its economic and political oppression.
(1) In capitalist society wages are the monetary expression of the value of labour-power, its price, appearing to be the price of labour. Wages hide the relationship of capitalist exploitation, creating the false impression that all the worker’s labour is paid for, whereas in reality wages constitute only the price of his labour-power.
(2) The main forms of wages are time wages and piece wages. Under the time-wage system the size of the worker’s wage-packet depends on the time he spends at work. Under the piece-wage system the size of the worker’s wage-packet depends on the number of articles he produces. For the purpose of increasing surplus-value the capitalists employ a variety of sweating systems of wage-payment, which lead to a tremendous increase in the intensity of labour and to an accelerated wearing-out of labour-power.
(3) Nominal wages are the amount of money received by the worker for the labour-power which he sells to the capitalist. Real wages are wages expressed in terms of the worker’s means of subsistence; they show what quantity of means of subsistence and services the worker can buy for his money wages.
(4) As capitalism develops real wages fall. Unlike the prices of other commodities the price of labour-power, as a rule, fluctuates below its value. This is due above all to the existence of unemployment, to extensive use of female and child labour and to the paying of extremely low wages to the agricultural workers and also to the workers in the colonial and dependent countries: An important factor in the decline in real wages is the rise in the prices of consumer goods, high rents and the growth of taxation.
(5) The working class, united in trade unions, conducts a struggle to shorten working hours and raise wages. The economic struggle of the proletariat against capital cannot by itself free the proletariat from exploitation. Only with the liquidation of the capitalist mode of production through revolutionary political struggle can the conditions be eliminated under which the working class is economically and politically oppressed.
IX. Accumulation of Capital and Impoverishment of the Proletariat.