Wage, Labor, and Capital

By Karl Marx – 1847 - 1849 

Edited by Frederick Engels 1891

Reviewed by Steve Halpern

At a certain point in the lives of all workers, we go to employers and apply for a job. Karl Marx thought about this question in 1847, and wrote about the relationship between workers and employers. Why do workers apply for jobs? Why do employers hire workers? How do employers view the workers under their employ? Where do employers get the money to pay workers?

Our History 

Before we begin to answer these questions, we need to look at a bit of history. In the past, there was slavery. In those days, there were people who sold human beings for a price. Once this price was paid, the slave was the property of the slave owner. The slave then needed to fulfill the tasks of the owner for the rest of his or her life. 

Then, there was the system of feudalism, where peasants worked on the manor of the lord. Peasants gave most of their produce to the lord, but had the right to keep a portion of that produce to sustain themselves. Unlike the slave, the peasant had the right to work a plot of land, and could not be sold to another lord. 

The slavery of the United States did not reflect the norms of feudalism, but was similar to the slave empires of Greece and Rome. There, slaves could be sold to other slave owners. However, late in the Roman Empire, the law was changed to prohibit slave families from being separated. In the slave system in this country, slave owners routinely sold family members and split them apart.

So, here we see one difference between feudalism and slavery. In feudalism the peasant produced their own subsistence. In slavery the slaves had no resources and depended on the owner for their subsistence.  

The capitalist reality

Now we can talk about what happens in capitalism. First, we can say that all of the commodities of the world, without exception, are produced by the workers of the world. I will call this the international working class. So, if the working class produces everything of value, why do workers need to apply for employment?

Marx argued that workers apply for jobs “to secure the necessary means of life.” The problem here is that while workers produce all wealth, in the capitalist system, the working class doesn’t have, “the necessary means of life.” This is why we apply for jobs.

Understanding this reality, we can also say that employers are completely dependent on the fact that workers don’t have the means to sustain ourselves. If we had the resources to sustain ourselves, we might not apply for employment. If we did choose to work a job and the employer said something we didn’t like, we could quit on the spot.

So, here we see why we go to work every day. Employers are no longer allowed to use instruments of torture to coerce workers, as was the case in slavery. Instead, employers understand that we need to do things their way, or we can hit the highway. Hitting the highway means that we might not have the means to sustain ourselves. This is the capitalist method of coercion.  

When we begin to see this relationship, we see how there is no real equality between capitalists and workers. Because of this lack of equality, capitalists view workers as mere commodities. 

When we turn a car left, it goes left. When we turn a car right, it goes right. Capitalists expect that workers will do as we are told, just as any commodity is used by its owner. In slavery times, the slave was the property of the owner for their entire lives. Capitalists have control over workers for eight or more hours per day.

The myth and the reality

Clearly, in the United States, there is a Constitution that contains the Bill of Rights. Among those rights are the right to freedom of speech. However, workers understand that employers have the power to fire employees who attempt to organize a union. Employers will not say that organizing a union is the grounds for termination. They merely hunt for some kind of infraction that will enable the employer to have a legal excuse for firing the union organizer. 

So, thinking about this relationship, we might notice a few things. Students routinely celebrate when they receive degrees. Workers might have a party when they learn they have been hired for a new job. These achievements signify that someone might begin to have a bit more independence. They might have a job that doesn’t seem to be as oppressive as those jobs that don’t require university degrees. 

However, Marx argued that for the worker, “life begins where this activity ceases.” In other words, because workers have no control over our environment where we work, our only reason for working is that paycheck. Only when we leave work, do we begin to do all those things we want to do. 

However, while workers routinely spend about one-third of the day working for an employer, there are political pundits who argue that many of these same workers are “apathetic.” The basis for this seemingly absurd charge is that many workers do not vote in the elections. 

The facts are that while workers produce all wealth, few if any pro-capitalist candidates argue that we deserve the lifetime right to health care, education, housing, food, transportation, communication, or exposure to cultural activities. However, the working class of the world has done literally all the work required to provide for all those goods and services. 

I see this charge of “apathy” by those pundits to be particularly offensive. Many of my coworkers routinely volunteered to work long hours of overtime. Today, many workers work two or even three jobs. They do this, because workers only receive a small part of the wealth our class produces.

So, now we come to the question: Where do employers get the money they pay workers? Initially, Karl Marx argued that workers sell their labor. Then, Marx modified this position and argued that workers sell “labor power” to capitalists. Frederick Engels modified Marx’s pamphlet to reflect this change in Marx’s thinking.

When we say that workers sell our labor, then there is an implication that because of the sale of this labor, capitalists are entitled to derive a profit. Marx argued that when workers sell “labor power” they are actually giving the capitalist a completed commodity, where the owners do nothing to produce that commodity. 

Marx refined this observation arguing that employers view workers as “variable capital,” as opposed to machinery that he called “constant capital.” The capitalist needs to pay the entire cost of the machine. However, capitalists only use labor for as long as they need that labor. Then, jobs are eliminated. Today, we have seen millions of jobs eliminated during the pandemic. So, while those workers might have thought they had jobs, all jobs under capitalism can be called “variable.” 

Marx called the capital employers received, “surplus capital.” We can also say that interest payments made to banks, and payments made to insurance companies and advertising agencies also reflect “surplus capital.” All these payments add absolutely no value to commodities. Yet, constant capital and variable capital are requirements in the production of literally all commodities. Understanding all of this, Marx concludes:

“The essence of a class which possesses nothing but the ability to work is a necessary presupposition of capital.

“It is only the domination of past, accumulated, materialized labor over immediate living labor that stamps the accumulated labor with capital.”

Here Marx identified the essence of capitalism. While workers produce all wealth, capitalists take that wealth and leave workers with, “nothing but the ability to work.” Then, they convert their “domination of the past” into the money they use to pay workers, and gouge out their super-profits. 

Workers struggle because human needs are more important than profits

Now, let’s think about what the word “war” means. Why in the world did the United States go to war against the people of Vietnam? Marx argued that the capitalist system needs to dominate economies in order to convert labor into capital. In order to do this, they create an environment where our only power is our “ability to work.” 

Strikes and revolutions erupt because workers and farmers feel that our interests are more important than being dominated by forces that are only interested in accumulating capital. This is why Vladimir Ilyich Lenin argued that “Imperialism is the highest stage of capitalism.”   

So, now you might be thinking that the way Marx explained our reality is completely different from the values we are all raised with. While Marx’s ideas might sound implausible, those ideas give us a clear explanation of the gross inequality we see in this country and the world today.

While the government argues that we live in a “democracy,” capitalists are driven to create an environment where the working class only will have, “the means to live” if we dedicate our lives to their drive to maximize profits. 

Understanding this reality, we can also consider that a different kind of political economic system could begin to solve some of the most horrendous problems we face. A worker’s government could organize society in a way where we don’t need to contribute to profits for corporations, interest to banks, or payments to insurance and advertising companies. 

Without the need to pay for all those unnecessary services, we could guarantee everyone the absolute lifetime right to food, clothing, housing, health care, education, transportation, communication, as well as exposure to culture. There would be absolutely no reason for workers in one country to go to war against workers in another country. We wouldn’t go to work so we might have “the means to live.” We would begin to work to improve the standard of living for the entire working class of the world. 

Clearly, establishing that kind of government will be a monumental task. However, when we explore the question of what does it mean to work for a living, we can begin to see the road to a rational future.