Capital: A Critique of Political Economy, Vol. I. The Process of Capitalist Production
By Karl Marx
One of Econlib’s aims is to put online the most significant works in the history of economic thought, and there can be no doubting the significance of Marx’s influence on both economic theory in the late 19th century and on the creation of Marxist states in the 20th century. From the time of the emergence of modern socialism in the 1840s (especially in France and Germany), free market economists have criticised socialist theory and it is thus useful to place that criticism in its intellectual context, namely beside the main work of one of its leading theorists,
Karl Marx.In 1848, when Europe was wracked by a series of revolutions in which both liberals and socialists participated and which both lost out to the forces of conservative monarchism or Bonapartism,
John Stuart Mill published his
Principles of Political Economy. The chapter on Property shows how important Mill thought it was to confront the socialist challenge to classical liberal economic theory. In hindsight it might appear that Mill was too accommodating to socialist criticism, but I would argue that in fact he offered a reasonable framework for comparing the two systems of thought, which the events of the late 20th century have finally brought to a conclusion which was not possible in his lifetime. Mill states in
Book II Chapter I “Of Property” that a fair comparison of the free market and socialism would compare both the ideal of liberalism with that of socialism, as well as the practice of liberalism versus the practice of socialism. In 1848 the ideals of both were becoming better known (and there were some aspects of the ideal of socialism which Mill found intriguing) but the practice of each was still not conclusive. Mill correctly observed that in 1848 no European society had yet created a society fully based upon private property and free exchange and any future socialist experiment on a state-wide basis was many decades in the future. After the experiments in Marxist central planning with the Bolshevik Revolution in 1917, the Chinese Communists in 1949, and numerous other Marxist states in the post-1945 period, there can be no doubt that the reservations Mill had about the practicality of fully-functioning socialism were completely borne out by historical events. What Mill could never have imagined, the slaughter of tens of millions of people in an effort to make socialism work, has ended for good any argument concerning the Marxist form of socialism.Econlib now offers online two important defences of the socialist ideal, Karl Marx’s three volume work on
Capital and the
collection of essays on Fabian socialism edited by George Bernard Shaw. These can be read in the light of the criticism they provoked among defenders of individual liberty and the free market: Eugen Richter’s anti-Marxist
Pictures of the Socialistic Future, Thomas Mackay’s
2 volume collection of essays rebutting Fabian socialism,
Ludwig von Mises post-1917 critique of
Socialism. One should not forget that
Frederic Bastiat was active during the rise of socialism in France during the 1840s and that many of his essays are aimed at rebutting the socialists of his day. The same is true for Gustave de Molinari and the other authors of the
Dictionnaire d’economie politique (1852). Several key articles on communism and socialism from the
Dictionnaire are translated and reprinted in Lalor’s
Cyclopedia.For further reading on Marx’s
Capital see David L. Prychitko’s essay
“The Nature and Significance of Marx’s
Capital: A Critique of Political Economy“.For further readings on socialism see the following entries in the
Concise Encyclopedia of Economics:
Poor Law Commissioners’ Report of 1834,
edited by Nassau W. Senior, et al.
March 1, 2004
Frederick Engels, Ernest Untermann, eds. Samuel Moore, Edward Aveling, trans.
First Pub. Date
Chicago: Charles H. Kerr and Co.
First published in German. Revised and Amplified According to the Fourth German Edition by Ernest Untermann Das Kapital, based on the 4th edition.
The text of this edition is in the public domain. Picture of Marx courtesy of The Warren J. Samuels Portrait Collection at Duke University.
- Editors Note to the First American Edition, by Ernest Untermann
- Authors Prefaces to the First and Second Editions, by Karl Marx
- Editors Prefaces, by Frederick Engels
- Part I, Chapter 1
- Part I, Chapter 2
- Part I, Chapter 3
- Part II, Chapter 4
- Part II, Chapter 5
- Part II, Chapter 6
- Part III, Chapter 7
- Part III, Chapter 8
- Part III, Chapter 9
- Part III, Chapter 10
- Part III, Chapter 11
- Part IV, Chapter 12
- Part IV, Chapter 13
- Part IV, Chapter 14
- Part IV, Chapter 15
- Part V, Chapter 16
- Part V, Chapter 17
- Part V, Chapter 18
- Part VI, Chapter 19
- Part VI, Chapter 20
- Part VI, Chapter 21
- Part VI, Chapter 22
- Part VII, Introduction
- Part VII, Chapter 23
- Part VII, Chapter 24
- Part VII, Chapter 25
- Part VIII, Chapter 26
- Part VIII, Chapter 27
- Part VIII, Chapter 28
- Part VIII, Chapter 29
- Part VIII, Chapter 30
- Part VIII, Chapter 31
- Part VIII, Chapter 32
- Part VIII, Chapter 33
- Works and Authors
WAGES themselves again take many forms, a fact not recognizable in the ordinary economical treatises which, exclusively interested in the material side of the question, neglect every difference of form. An exposition of all these forms however, belongs to the special study of wage-labour, not therefore to this work. Still the two fundamental forms must be briefly worked out here.
The sale of labour-power, as will be remembered, takes place for a definite period of time. The converted form under which the daily, weekly, &c., value of labour-power presents itself, is hence that of time-wages, therefore day-wages, &c.
Next it is to be noted that the laws set forth, in the 17th chapter, on the changes in the relative magnitudes of price of labour-power and surplus-value, pass by a simple transformation of form, into laws of wages. Similarly the distinction between the exchange-value of labour-power, and the sum of the necessaries of life into which this value is converted, now reappears as the distinction between nominal and real wages. It would be useless to repeat here, with regard to the phenomenal form, what has been already worked out in the substantial
form. We limit ourselves therefore to a few points characteristic of time-wages.
The sum of money
*10 which the labourer receives for his daily or weekly labour, forms the amount of his nominal wages, or of his wages estimated in value. But it is clear that according to the length of the working-day, that is, according to the amount of actual labour daily supplied, the same daily or weekly wage may represent very different prices of labour,
i.e., very different sums of money for the same quantity of labour.
*11 We must, therefore, in considering time-wages, again distinguish between the sum total of the daily or weekly wages, &c., and the price of labour. How then to find this price,
i.e., the money-value of a given quantity of labour? The average price of labour is found, when the average daily value of the labour-power is divided by the average number of hours in the working-day. If,
e.g., the daily value of labour-power is 3 shillings, the value of the product of 6 working hours, and if the working-day is 12 hours, the price of 1 working hour is 3/12 shillings=3d. The price of the working-hour thus found serves as the unit measure for the price of labour.
It follows therefore that the daily and weekly wages, &c., may remain the same, although the price of labour falls constantly. If,
e.g., the habitual working-day is 10 hours and the daily value of the labour-power 3s., the price of the working hour is 3 3/5d. It falls to 3d. as soon as the working-day rises to 12 hours, to 2 2/5 d. as soon as it rises to 15 hours. Daily or weekly wages remain, despite all this, unchanged. On the contrary, the daily or weekly wages may rise, although the price of labour remains constant or even falls. If,
e.g., the working day is 10 hours, and the daily value of labour-power 3 shillings, the price of one working hour is 3 3/5 d. If the labourer in consequence of increase of trade works 12 hours, the price of labour remaining the same, his daily wage
now rises to 3 shillings 7 1/5 d. without any variation in the price of labour. The same result might follow if, instead of the extensive amount of labour, its intensive amount increased.
*12 The rise of the nominal daily or weekly wages may therefore be accompanied by a price of labour that remains stationary or falls. The same holds as to the income of the labourer’s family, as soon as the quantity of labour expended by the head of the family is increased by the labour of the members of his family. There are, therefore, methods of lowering the price of labour independent of the reduction of the nominal daily or weekly wages.
As a general law it follows that, given the amount of daily, weekly labour, &c., the daily or weekly wages depend on the price of labour which, itself varies either with the value of labour-power, or with the difference between its price and its value. Given, on the other hand, the price of labour, the daily or weekly wages depend on the quantity of the daily or weekly labour.
The unit measure for time-wages, the price of the working hour, is the quotient of the value of a day’s labour-power, divided by the number of hours of the average working-day. Let the latter be 12 hours, and the daily value of labour-power 3 shillings, the value of the product of 6 hours of labour. Under these circumstances the price of a working-hour is 3d.,
the value produced in it is 6d. If the labourer is now employed less than 12 hours (or less than 6 days in the week),
e.g., only 6 or 8 hours, he receives, with this price of labour, only 2s. or 1s. 6d. a day.
*14 As on our hypothesis he must work on the average 6 hours daily, in order to produce a day’s wage corresponding merely to the value of his labour-power, as according to the same hypothesis he works only half of every hour for himself, and half for the capitalist, it is clear that he cannot obtain for himself the value of the product of 6 hours if he is employed less than 12 hours. In previous chapters we saw the destructive consequences of over-work; here we find the sources of the sufferings that result to the labourer from his insufficient employment.
If the hour’s wage is fixed so that the capitalist does not bind himself to pay a day’s or a week’s wage, but only to pay wages for the hours during which he chooses to employ the labourer, he can employ him for a shorter time than that which is originally the basis of the calculation of the hour-wage, of the unit-measure of the price of labour. Since this unit is determined by the ratio (daily value of labour-power)/(working-day of a given number of hours). it, of course, loses all the meaning as soon as the working day ceases to contain a definite number of hours. The connexion between the paid and the unpaid labour is destroyed. 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 over-work alternate with relative or absolute cessation of work. He can, under the pretence of paying “the normal price of labour,” abnormally lengthen the working-day without any corresponding compensation to the labourer. Hence
the perfectly rational revolt in 1860 of the London labourers, employed in the building trades, against the attempt of the capitalists to impose on them this sort of wage by the hour. The legal limitation of the working-day puts an end to such mischief, although not, of course, to the diminution of employment caused by the competition of machinery, by changes in the quality of the labourers employed, and by crisis partial or general.
With an increasing daily or weekly wage the price of labour may remain nominally constant, and yet may fall below its normal level. This occurs every time that, the price of labour (reckoned per working hour) remaining constant, the working-day is prolonged beyond its customary length. If in the fraction: (daily value of labour-power)/(working-day) the denominator increases, the numerator increases yet more rapidly. The value of labour-power, as dependent on its wear and tear, increases with the duration of its functioning, and in more rapid proportion than the increase of that duration. In many branches of industry where time-wage is the general rule without legal limits to the working-time, the habit has, therefore, spontaneously grown up of regarding the working-day as normal only up to a certain point,
e.g., up to the expiration of the tenth hour (“normal working-day,” “the day’s work,” “the regular hours of work”). Beyond this limit the working-time is over-time, and is, taking the hour as unit-measure, paid better (“extra pay”), although often in a proportion ridiculously small.
*15 The normal working-day exists here as a fraction of the actual working-day, and the latter, often during the whole year, lasts longer than the former.
*16 The increase in the price of labour with the extension of the working-day beyond a certain normal
limit, takes such a shape in various British industries that the low price of labour during the so-called normal time compels the labourer to work during the better paid over-time, if he wishes to obtain a sufficient wage at all.
*17 Legal limitation of the working-day puts an end to these amenities.
It is a fact generally known that, the longer the working-days, in any branch of industry, the lower are the wages.
*19 A. Redgrave, factory-inspector, illustrates this by a comparative review of the 20 years from 1839-1859, according to which wages rose in the factories under the 10 hours’ law, whilst they fell in the factories in which the work lasted 14 to 15 hours daily.
From the law: “the price of labour being given, the daily or weekly wage depends on the quantity of labour expended,” it follows, first of all, that, the lower the price of labour, the greater must be the quantity of labour, or the longer must be
the working-day for the labourer to secure even a miserable average-wage. The lowness of the price of labour acts here as a stimulus to the extension of the labour-time.
On the other hand, the extension of the working-time produces, in its turn, a fall in the price of labour, and with this a fall in the day’s or week’s wages.
The determination of the price of labour by:
(daily value of labour-power)/(working-day of a given number of hours),
shows that a mere prolongation of the working-day lowers the price of labour, if no compensation steps in. But the same circumstances which allow the capitalist in the long run to prolong the working-day, also allow him first, and compel him finally, to nominally lower the price of labour, until the total price of the increased number of hours is lowered, and, therefore, the daily or weekly wage. Reference to two circumstances is sufficient here. If one man does the work of 1½ or 2 men, the supply of labour increases, although the supply of labour-power on the market remains constant. The competition thus created between the labourers allows the capitalist to beat down the price of labour, whilst the falling price of labour allows him, on the other hand, to screw up still further the working-time.
*22 Soon, however, this command over abnormal quantities of unpaid labour,
i.e., quantities in excess of the average social amount, becomes a source of competition amongst the capitalists themselves. A part of the price of the commodity consists of the price of labour. The unpaid part of the labour-price need not be reckoned in the price of the
commodity. It may be presented to the buyer. This is the first step to which competition leads. The second step to which it drives, is to exclude also from the selling-price of the commodity, at least a part of the abnormal surplus-value created by the extension of the working-day. In this way an abnormally low selling-price of the commodity arises, at first sporadically, and becomes fixed by degrees; a lower selling price which henceforward becomes the constant basis of a miserable wage for an excessive working-time, as originally it was the product of these very circumstances. This movement is simply indicated here, as the analysis of competition does not belong to this part of our subject. Nevertheless, the capitalist may, for a moment, speak for himself. “In Birmingham there is so much competition of masters one against another, that many are obliged to do things as employers that they would otherwise be ashamed of; and yet no more money is made, but only the public gets the benefit.”
*23 The reader will remember the two sorts of London bakers, of whom one sold the bread at its full price (the “full-priced” bakers), the other below its normal price (“the underpriced,” “the undersellers”). The “full-priced” denounced their rivals before the Parliamentary Committee of Inquiry: “They only exist now by first defrauding the public, and next getting 18 hours’ work out of their men for 12 hours’ wages…. The unpaid labour of the men was made…the source whereby the competition was carried on, and continues so to this day…. The competition among the master bakers is the cause of the difficulty in getting rid of night-work. An underseller, who sells his bread below the cost price according to the price of flour, must make it up by getting more out of the labour of the men…. If I got only 12 hours’ work out of my men, and my neighbour got 18 or 20, he must beat me in the selling price. If the men could insist on payment for over-work, this would be set right…. A large number of those employed by the undersellers are foreigners,
and youths, who are obliged to accept almost any wages they can obtain.”
This jeremiad is also interesting because it shows, how the appearance only of the relations of production mirrors itself in the brain of the capitalist. 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. The category, surplus-labour-time, does not exist at all for him, since it is included in the normal working-day, which he thinks he has paid for in the day’s wages. But overtime does exist for him, the prolongation of the working day beyond the limits corresponding with the usual price of labour. Face to face with his underselling competitor, he even insists upon extra pay for this overtime. He again does not know that this extra pay includes unpaid labour, just as well as does the price of the customary hour of labour. For example, the price of one hour of the 12 hours’ working-day is 3d., say the value-product of half a working-hour, whilst the price of the overtime working-hour is 4d., or the value-product of 2/3 of a working-hour. In the first case the capitalist appropriates to himself one-half, in the second, one-third of the working-hours without paying for it.
i.e., ten hours a day were the regular hours of work, for which a nominal wage of 1s. 2d. per day was paid to a man, there being every day overtime for three or four hours, paid at the rate of 3d. per hour. The effect of this system…a man could not earn more than 8s. per week when working the ordinary hours…without overtime they could not earn a fair day’s wages.” (“Rept. of Insp. of Factories,” April 30th, 1863, p. 10.) “The higher wages, for getting adult males to work longer hours, are a temptation too strong to be resisted.” (“Rept. of Insp. of Fact.,” April 30th, 1848, p. 5.) The bookbinding trade in the city of London employs very many young girls from 14 to 15 years old, and that under indentures which prescribe certain definite hours of labour. Nevertheless, they work in the last week of each month until 10, 11, 12, or 1 o’clock at night, along with the older labourers, in a very mixed company. “The masters tempt them by extra pay and supper,” which they eat in neighboring public-houses. The great debauchery thus produced among these ‘young immortals’ (“Children’s Employment Comm., V. Rept.,” p. 44, n. 191) is compensated by the fact that among the rest many Bibles and religious books are bound by them.
e.g., have, on account of the low price of labour, to work 15 hours a day in order to hammer out their miserable weekly wage. “It’s a great many hours in a day (6 a.m. to 8 p.m.), and he has to work hard all the time to get 11d. or 1s., and there is the wear of the tools, the cost of firing, and something for waste iron to go out of this, which takes off altogether 2½d. or 3d.” (“Children’s Employment Com., III. Report,” p. 136, n. 671.) The women earn by the same working-time a week’s wage of only 5 shillings (l. c., p. 137, n. 674.
e.g., refused to work the customary long hours, “he would very shortly be replaced by somebody who would work any length of time, and thus be thrown out of employment.” (“Report of Inspectors of Fact.,” 31st Oct., 1848. Evidence, p. 39, n. 58.) “If one man performs the work of two…the rate of profits will generally be raised…in consequence of the additional supply of labour having diminished its price.” (Senior, l. c., p. 14.)
Part VI, Chapter XXI.