Karl Marx
Wage Labour and Capital
The General Law that Determines the Rise and Fall of Wages and Profits
We have said: "Wages are not a share of the worker
in the commodities produced by him. Wages are that part of already existing
commodities with which the capitalist buys a certain amount of productive
labor-power." But the capitalist must replace these wages out of the price
for which he sells the product made by the worker; he must so replace it
that, as a rule, there remains to him a surplus above the cost of production
expended by him, that is, he must get a profit.
The selling price of the commodities produced by the worker is
divided, from the point of view of the capitalist, into three parts:
First, the replacement of the price of the raw materials advanced by
him, in addition to the replacement of the wear and tear of the tools,
machines, and other instruments of labor likewise advanced by him;
Second, the replacement of the wages advanced; and
Third, the surplus leftover – i.e., the profit of the capitalist.
While the first part merely replaces previously existing values, it is
evident that the replacement of the wages and the surplus (the profit of
capital) are as a whole taken out of the new value, which is produced by
the labor of the worker and added to the raw materials. And in this sense
we can view wages as well as profit, for the purpose of comparing them
with each other, as shares in the product of the worker.
Real wages may remain the same, they may even rise, nevertheless
the relative wages may fall. Let us suppose, for instance, that all means
of subsistence have fallen 2/3rds in price, while the day's wages have
fallen but 1/3rd – for example, from three to two shillings. Although
the worker can now get a greater amount of commodities with these two shillings
than he formerly did with three shillings, yet his wages have decreased
in proportion to the gain of the capitalist. The profit of the capitalist
– the manufacturer's for instance – has increased one shilling, which
means that for a smaller amount of exchange values, which he pays to the
worker, the latter must produce a greater amount of exchange values than
before. The share of capitals in proportion to the share of labor has risen.
The distribution of social wealth between capital and labor has become
still more unequal. The capitalist commands a greater amount of labor with
the same capital. The power of the capitalist class over the working class
has grown, the social position of the worker has become worse, has been
forced down still another degree below that of the capitalist.
What, then, is the general law that determines the rise and fall
of wages and profit in their reciprocal relation?
They stand in inverse proportion to each other. The share of (profit)
increases in the same proportion in which the share of labor (wages) falls,
and vice versa. Profit rises in the same degree in which wages fall; it
falls in the same degree in which wages rise.
It might perhaps be argued that the capitalist class can gain
by an advantageous exchange of his products with other capitalists, by
a rise in the demand for his commodities, whether in consequence of the
opening up of new markets, or in consequence of temporarily increased demands
in the old market, and so on; that the profit of the capitalist, therefore,
may be multiplied by taking advantage of other capitalists, independently
of the rise and fall of wages, of the exchange value of labor-power; or
that the profit of the capitalist may also rise through improvements in
the instruments of labor, new applications of the forces of nature, and
so on.
But in the first place it must be admitted that the result remains
the same, although brought about in an opposite manner. Profit, indeed,
has not risen because wages have fallen, but wages have fallen because
profit has risen. With the same amount of another man's labor the capitalist
has bought a larger amount of exchange values without having paid more
for the labor on that account – i.e., the work is paid for less in proportion
to the net gain which it yields to the capitalist.
In the second place, it must be borne in mind that, despite the
fluctuations in the prices of commodities, the average price of every commodity,
the proportion in which it exchanges for other commodities, is determined
by its cost of production. The acts of overreaching and taking advantage
of one another within the capitalist ranks necessarily equalize themselves.
The improvements of machinery, the new applications of the forces of nature
in the service of production, make it possible to produce in a given period
of time, with the same amount of labor and capital, a larger amount of
products, but in no wise a larger amount of exchange values. If by the
use of the spinning-machine I can furnish twice as much yarn in an hour
as before its invention – for instance, 100 pounds instead of 50 pounds
– in the long run I receive back, in exchange for this 100 pounds no more
commodities than I did before for 50; because the cost of production has
fallen by 1/2, or because I can furnish double the product at the same
cost.
Finally, in whatsoever proportion the capitalist class, whether
of one country or of the entire world-market, distribute the net revenue
of production among themselves, the total amount of this net revenue always
consists exclusively of the amount by which accumulated labor has been
increased from the proceeds of direct labor. This whole amount, therefore,
grows in the same proportion in which labor augments capital – i.e., in
the same proportion in which profit rises as compared with wages.