STUDYING DAS KAPITAL, Part 6 (of 8)
Summarizing, mostly defending and, at times, critiquing Volume 1
Part 6, called “Wages”, consists of Chapters 19 - 22. If you prefer to download a PDF with all eight parts of my study notes combined into a single document, click the button below to do that.
Chapter 19: The Transformation of the Value (and Respective Price) of Labour-Power into Wages
Marx reiterates that how much capitalists pay for labor power, and how much surplus value they extract from workers, depends on how cheaply society is able to produce the workers’ consumption basket. He reiterates that “labour-power” (the capacity to work) rather than “labour” is what the worker actually sells to the capitalist.
He stresses that the Labour Theory of Value (LTV ) does not care about how much direct and indirect labour time historically went into making a commodity. What matters is how much labour time would be required to make it today. If the wood that made a guitar I bought years ago can be acquired today with less labour time then that reduces my guitar’s labour time content (i.e. its exchange value).
ASIDE: Note what Marx is not saying. He is not saying that labour is the only input to production. However the LTV observes that all the direct and indirect inputs require labour. Several decades after Marx died, economist Piero Sraffa used a simplified economic model to show that prices in capitalism can be expressed as an infinite series, and that when profits are zero, they are indeed proportional to labour time - as the LTV says they should be. Ian Wright expanded Staffa’s analysis to show that even when profits are not zero, prices are proportional to labour time. But again, the relevant labour time in these models is the labour time required in the present.
He says bourgeois economists focus on where the supply and demand curves intersect and happily ignore that the wage defined by their intersection does not account for the unpaid labour the capitalist extracts in the form of surplus value. Unlike more primitive systems of elite rule, Marx says, capitalism obscures the way it takes unpaid labour.
ASIDE: Marx should have added here that under capitalism supply and demand for labour power never quite balance due to the capitalist’s necessity of keeping a “reserve army” of unemployed that Marx mentioned in Chapter 15 section 6.
He says the exchange value of labour may be constant (i.e. the labour time required to produce the worker’s consumption basket) even though the money price of labour may fluctuate due to changes in supply and demand for labour power. The workday is always split into periods of paid and unpaid labour but the wage appears as if it were full payment for a full day.
Chapter 20: Time- Wages
Paying by the hour - when there is no legal limit to the work day - allows the capitalist to “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 explains that the brutality of these tactics led to a major worker revolt in 1860 in London - and to legal regulations.
Marx refers the reader back to a historical example he discussed earlier where extreme (beyond normal) exploitation of workers in bakeries led to turmoil among capitalists through intense price wars. Some bakers accused their rivals of illegally exploiting workers, and thereby getting a competitive edge. Marx points out that the bakers were blind to the systematic exploitation they all engaged in: “The capitalist does not know that the normal price of labour also includes a definite quantity of unpaid labour, and that this very unpaid labour is the normal source of his gain”.
Chapter 21 : Piece Wages
Paying workers per piece is attractive to capitalists because it can encourage greater work intensity. But the piece price is set so that the capitalist gets as much or more surplus value than he would with a wage set per day. The first clue that this is so, says Marx, is that both types of wages can exist side-by-side in the same industry.
Marx shows that a wage per piece can sometimes cause big problems for capitalists and therefore get replaced by an hourly rate. He mentions a big strike by ribbon-weavers in 1860 in response to bosses lowering the wage per piece. Marx observes that a wage per piece can bring an unwanted (from the capitalist’s perspective) sense of individuality, liberty and independence to workers - who become irate if a reduction of their wage per piece does not accompany the product becoming cheaper for consumers. The capitalist, says Marx, then “declares roundly that the productiveness of labour does not concern the labourer at all.”
Chapter 22: National Differences of Wages
Marx considers how to compare wages in different countries and notes that piece-price wages are better for making comparisons of productivity and intensity of labor in different countries
Within a country, labour intensity that is below average is unsustainable, “requires more than the socially necessary time” and therefore does not impact the exchange value of national production.
ASIDE: The word “average” is problematic above because to be average some must be sustained below the average and others above it. But obviously there is a minimum level of intensity that must be sustained for a capitalist workplace to survive in a competitive market.
However, at the international level, Marx says, a country can (for various reasons) have an intensity level below the average of other countries. At the international level he says the more productive countries will also tend to have greater work intensity. [Recall chapter 17 where Marx says intensity is largely about how minutely workers are supervised, and that a shorter mandatory workday was partly offset by increased intensity] But he adds that the more productive country may not be more intense if foreign competitors force it to lower its selling price. Why would less productive countries have a cost advantage over more productive ones? Marx doesn’t elaborate but perhaps he was thinking if the less productive country had better access to some essential raw materials, or some other natural advantage like closer proximity to a market for its products. In that case the more productive country could find itself overproducing (a problem Marx has already touched on at the end of Chapter 18) - hence compelled to sell cheaper and scale down production.
Marx indentifies the different “role played by women and children” as a factor in wages differences between countries (the level of permissiveness for them being in the work force can vary among countries) - as can training costs for all workers and the availability of food.
Marx says that rich (developed) countries will tend to have lower interest rates (“value of money”). Marx concludes that higher nominal wages will exist in more developed countries but not necessarily higher real wages which depend on the price of the workers’ consumption basket (their “means of subsistence”).
Marx cites evidence - two studies - finding that workers see higher wages in more developed capitalist countries, but also a lower share of their total production: meaning the capitalist gets a higher share of surplus value. So Marx says “relative wages” are lower
Marx uses the findings of a study done by Alexander Redgrave, a factory inspector, to bash Russian industry in his day:
The managers are, of course, English, as the native Russian capitalist is of no use in factory business. Despite all the over-work, continued day and night, despite the most shameful under-payment of the workpeople, Russian manufacture manages to vegetate only by prohibition of foreign competition.
He shows Redgrave’s data for spindles per cotton factory which reveals how much more advanced and productive England was at the time compared to its European rivals. England had an average of 12,600 spindles per factory compared to only 8,000 for Switzerland, its strongest competitor. Great Britain employed one person to 74 spindles while Switzerland employed one person to 55.
He ends the chapter by ridiculing H. Carey who tried, and failed, to show that wage differences among countries are proportional to differences in worker productivity. Carey blamed government intervention in the form of taxes for the data not saying what he thought it should. Marx said “our analysis of the production of surplus value shows the absurdity of this [Carey’s] conclusion” but Marx did not explain how exactly his analysis rules out such a conclusion.
ASIDE: Recall that throughout Marx’s analysis of surplus value in earlier chapters, he argued that the capitalist captures the bulk of productivity gains through increased surplus value - that even when workers win legal reforms through bitter struggle, the capitalist class manages to gain on them relatively even if workers gain absolutely. Hence, contrary to what Carey assumed, wages within countries would not come close to keeping pace with productivty gains. Perhaps Marx thought to himself “readers who‘ve read this far should not need me to spell it out”, but I think he should have.