(FULL) Marx - Wage Labour and Capital
What is the true minimum wage?
- The price required to keep the laborer working is simply the minimum to survive, a constant across each job.
How are REAL Wages Expressed in the Real World?
- Consist of the number of basic services and goods that can be produced with a worker's nominal wages. - In the real world, this acts as a measure of the worker's ability to purchase necessary goods to survive and flourish.
Why do capitalists seek to simplify/divide labor?
- Division of labor dumbs down the work, thus making it less expensive (recall the training portion of the work), and thus lowers the wage. - This drop-in wages has nothing to do with the moral character of the capitalist — it is a structural effect of capital accumulation or the logic of capital itself, increasing the suffering of workers.
What is the impact of competition among sellers?
- Each seller tries to sell cheaper than the other. - As a result, competition among the sellers forces down the price of the commodities offered by each seller.
What does All Capital Require?
- Every component of Capital requires labor to be constructed and built.
What are wages and their replacement? (2nd Category)
- Related to the labor of the worker and adds greater value to the raw materials. - The change follows the same law as the third category. - Can be viewed as shares in the product of the worker.
How does production change?
- Any change in social relations will change the production process significantly. - History will reflect these differences in social and production processes across time and societies. - Social and production processes are related, as production consists of many social relations working in the production process. - Examples of which include how the gun changed the workings of social relations within armies, in addition to changing how armies are created and operated.
How can the capitalist class gain advantages THROUGH SUPPLY AND DEMAND?
- 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. - The profit of the capitalist may also rise through improvements in the instruments of labor or new applications of the forces of nature.
How do workers produce/create Capital?
- Capital can multiply itself only by exchanging itself for labor-power, utilizing wage-labor. - The labor-power of the wage-laborer can exchange itself for capital only by increasing the capital value of a commodity, utilizing wage-labor. - Therefore, a capital increase is only possible because of the proletarian class's labor.
How does production relate to capital?
- Capital is a social relation of production under a bourgeois society, as capital entails the means of subsistence, the instruments of labor, the raw materials. - All of these must be produced by social relations working in the production process.
Why does capital need to grow?
- Capital must expand, or its need in managing commodities grows useless. - The faster capital grows, the richer the bourgeoisie, the better the business, the more workers the capitalist needs, the greater the need for workers to sell themselves.
What rules do capitalists follow in growing their productive capital?
- Capitalists can drive others from the market and carry off capital only by selling cheaply. - To sell more cheaply without ruining himself, he must produce more cheaply and increase the productive force of labor in the business.
Productive Capital
- Commodities or resources useful for the production of other goods. - Growth of the power of accumulated labor(PAST SURPLUS-VALUE) over living labor(CURRENT LABOR-POWER, CREATES SURPLUS-VALUE) - Growth of the rule of the bourgeoisie over the working class.
What Competitive Forces(Within a Market) CHANGE the Price of a Commodity?
- Competition among sellers. - Competition among buyers. - Competition between sellers and buyers.
How can the capitalist class gain advantages over the proletarians?
- Gaining 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. - Taking advantage of other capitalists. - The profit of the capitalist may also rise through improvements in the instruments of labor or new applications of the forces of nature.
How does history reflect production, and VICE VERSA?
- History will reflect these differences in social and production processes across time and societies. - Social and production processes are related, as production consists of many social relations working in the production process.
What if wages do increase?
- If capital grows rapidly, wages may rise, but the profit of capital rises much, much faster. - The material position of the worker has improved but at the cost of his social position. The social chasm that separates him from the capitalist has widened.
When do RELATIVE wages increase?
- If nominal wages increase while profits stagnate, then relative wages have gone up. - This means more and more power for the worker and less and less power/profit for the capitalist.
When do RELATIVE wages decrease?
- If nominal wages remain the same while profits keep on increasing, then relative wages have gone down. - This means less and less power for the worker and more and more power/profit for the capitalist.
What happens to WORKERS when productive capital grows?
- If productive capital grows, the demand for labor grows, as more labor is required to expand more capital. This demand will increase prices as competition for labor-power grows. - This will not suffice for the worker, as their position relative to the capitalists will remain the same over time, and the gratification they receive will be minimal compared to the capitalist.
How do wages increase with capital?
- If the income of the worker increases with the rapid growth of capital, there is at the same time a widening of the social chasm that divides the worker from the capitalist, and an increase in the power of capital over labor, a greater dependence of labor upon capital. - If capital grows rapidly, wages may rise, but the profit of capital rises much, much faster.
In what manner does the growth of productive capital affect wages?
- If the productive capital of bourgeois society generally grows, growth of labor employed/purchased also occurs. - The individual profits and returns of capitalists increase greatly.
When do REAL Wages decrease?
- If wages remain the same but the price of services and goods needed to survive increases, survival is significantly harder. REAL wages have DECREASED.
Why are exchange values needed for Capitalism?
- In addition, capital must also contain exchange values for other commodities and types of production. - Because if capital could only be used to produce a single commodity, it would be useless to many, because the ability to purchase and produce a single commodity is not valuable. - As a result, capital applies to the production of all products with the use of exchange values.
What happens during production?
- In the production process, humans work in their environment and with each other. - They produce only by working together in a specified manner and reciprocally exchanging their activities to produce a commodity with available capital.
Why is labor necessary under a bourgeois-dominated society?
- Labor is required to convert a thing into capital and provide it with a greater value. - Therefore, the existence of a class that possesses nothing but the ability to work is a necessary presupposition of capital. - Labor under bourgeois-dominated society serves as the means of preserving and multiplying its exchange value.
What takes place in the exchange between the capitalist and the wage-laborer?
- Laborers receive subsistence for their labor power. - Capitalists receive the worker's labor, with the force that makes commodities and their labor into capital.
What determines differences in wages?
- Mostly because of the cost of education and training as a laborer. This differs across each job.
Why are some wages lower than others?
- Mostly because of the cost of education and training as a laborer. This differs across each job. - The less training required for a job, the lower the cost of production of the worker, the lower the price of his labor-power, his wages. - The more training required for a job, the higher the cost of production of the worker, the higher the price of his labor-power, his wages.
What happens as more labor is needed?
- Not only does capitalism pit the worker against the capitalist — but it also pits worker against worker. - In addition, the working class is also recruited from the higher strata of society, since more and more labor will always be required for production.
What is surplus leftover of production(Profit)? (3rd Category)
- Produced by the labor of the worker and adds greater value to the raw materials. - The change follows the same law as the second category. - Can be viewed as shares in the product of the worker.
How do capitalists grow their productive capital?
- Productive forces of labor are increased by a greater division/simplification of labor and by a more general introduction and constant improvement of machinery. - The capitalists have a universal rivalry to maximize the productive forces of labor.
How are social relations and production Related?
- Social and production processes are related, as production consists of many social relations working in the production process. - Examples of which include how the gun changed the workings of social relations within armies, in addition to changing how armies are created and operated.
How can wages affect the living of workers?
- Supply and demand can increase the prices of other commodities, and the instability of those markets will lead to great suffering. - If wages remain the same but the price of services and goods needed to survive increases, survival is significantly harder. - Vice versa, If wages remain the same but the price of services and goods needed to survive decreases, survival is significantly easier.
Real Wages
- The actual purchasing power of income. - The effective buying power of wages. - Consist of the number of basic services and goods that can be produced with a worker's nominal wages.
What is the effect of capital on democracy?
- The capitalist gets more and more powerful while the worker is perpetually losing power and social influence. - The inequality of wealth between them makes the one have an enormous amount of power and influence and the other have virtually none at all. - Capital destroys democracy while claiming to spread it throughout the world.
Minimum Wage
- The cost of the continued existence and sustenance of the worker while employed under an employer. - This is the bare minimum to keep a worker working and producing value. - Doesn't account for the worker's education and training costs.
What happens when relative wages decrease?
- The distribution of social wealth between capital and labor has become even more unequal. - The capitalist commands more labor with the same capital.
How do workers and capitalists both "achieve" their objectives?
- The farmer requires labor-power to reproductively profit, while the laborer requires sustenance to survive. - The farmer and laborer exchange labor power and means for sustenance as needed for both to achieve their goals.
What is the effect of capital on workers?
- The increase of capital/profit decreases the relative wages of workers, which amounts to saying that the tendency of capitalism is to create more and more distance between capitalist and worker. - The capitalist gets more and more powerful while the worker is perpetually losing power and social influence.
Labor-saving devices
- The introduction of machines. - When labor costs more than the profit gained, substitute for a machine. This lowers employment and again makes labor cheap. - BUT in a Marxist world, you can't buy a machine for less than it is 'worth'. It is only from the LIVING power of a worker that you can realize profit, as labor is required and converts all goods into capital.
How is labor-power turned into capital?
- The labor-power of the wage-laborer can exchange itself for capital only by increasing the capital value of a commodity, utilizing wage-labor. - Therefore, a capital increase is only possible because of the proletarian class's labor.
How does fewer training/educational costs impact wages?
- The less training required for a job, the lower the cost of production of the worker, the lower the price of his labor-power, his wages. - In industries and jobs with no training required, the cost of production of labor-power(wages) is limited almost exclusively to the capital necessary for keeping him in working condition.
What is the Effect of Capitalist Competition on the Capitalist Class, the Middle Class, and the Working Class?
- The more productive capital grows, the more it extends the division of labor and the application of machinery. - The more the division of labor and the application of machinery extend, the more competition among the workers, the more their wages shrink together.
What happens as labor is more simplified/divided?
- The more the division of labor and the application of machinery extend, the more competition among the workers, the more their wages shrink together. - Division of labor dumbs down the work, thus making it less expensive (recall the training portion of the work), and thus lowers the wage. - This drop-in wages has nothing to do with the moral character of the capitalist — it is a structural effect of capital accumulation or the logic of capital itself.
In what manner does the growth of productive capital affect capitalists?
- The multiplication of individual capitals increases the competition among capitalists. - The increasing magnitude of increasing capital provides the means of leading to more labor being employed to compete in the market, creating more capital to invest.
What is the Cost of Production of Labor-Power?
- The price of the labor-time necessary for the production of labor-power. - It is the price required to keep the laborer working, his education, and training as a laborer.
How are wages/profit connected?
- The profit of the capitalist is directly and structurally tied to the wage of the worker. - If relative wages go down, then profit goes up. - They are related by the law of inverse proportion.
Relative Wages
- The relation between Wages and Capital. - Disparity in Profits/Capital Growth and Wages. - In other words, relative wages have to do with the RATIO between necessary labor and surplus labor(Capital/Profits).
What is the result of capital expansion?
- The result remains the same, where the capitalists grow more power since they can purchase more labor-power and production power with their capital. - With the same labor, the capitalist has bought a larger amount of commodities and exchanged values without paying more for the labor.
What sellers are most motivated to do?
- The seller that sells the commodity at the cheapest price is sure to take over the market. - Every seller wants to sell as much as possible, and each seller will do so until they are the only seller. - At which point profit and survival is guaranteed for the seller.
How are the rise and fall of wages and profit inversely correlated?
- The share of (profit) increases in the same proportion in which the share of labor (wages) falls, and vice versa. - Profit rises to the same degree in which wages fall. - It falls to the same degree in which wages rise. - They stand in inverse proportion to each other.
What do workers do in more competitive labor markets?
- The worker must maintain his wage by either working longer or more intensely or both. - This produces more competition between workers, which means that the cost of wages is driven down. - Not only does capitalism pit the worker against the capitalist — but it also pits worker against worker.
Why is profit stolen surplus value?
- There is one difference between HUMAN labor power as a commodity, and that of every other non-human commodity. - The cost of producing a human being ("Its sustenance") might not necessarily be equal to the amount of value that a worker can PRODUCE in a given day. - Thus, if it takes 6 hours of labor time to provide the value needed for a worker's sustenance, then the remaining hours of work time are SURPLUS Profits.
How does capital form?
- They produce only by working together in a specified manner and reciprocally exchanging their activities to produce a commodity with available capital. - To produce commodities, they have definite connections and relations to one another and allow production to take place.
Why is the growth of wages not important to workers?
- This will not suffice for the worker, as their position relative to the capitalists will remain the same over time, and the gratification they receive will be minimal compared to the capitalist. - In addition, wages are not the only factor in living conditions and worker gratification.
How does Capital operate under a bourgeois-dominated society?
- Under a bourgeois-dominated society, capital is necessary to continue profits and purchase commodities, as capital is what allows the purchase of goods and production. - However, there must be a process to turn things into capital that can be used to purchase production power.
When do REAL Wages increase?
- Vice versa, If wages remain the same but the price of services and goods needed to survive decreases, survival is significantly easier. REAL wages have INCREASED.
Summary of Chapter 3
- Wages = The Price of Labor-Power. - The Price of Labor-Power = The Cost of Production of Labor-Power - The Cost of Production of Labor-Power = The price required to keep the laborer working, his education, and training as a laborer. - Wages vary because of training and educational costs. - MINIMUM WAGE: The cost of the continued existence and sustenance of the worker while employed under an employer.
Summary of Section 5
- Wages are determined above all by their relations to the gain, the profit, of the capitalist. - In other words, wages are a proportionate, relative quantity.
Outside of Labor-Power, What are the Other Costs Manufacturers Must Account for?
- When calculating production costs, manufacturers and capitalists account for the need and cost to replace tools and materials needed for labor and production. - Similarly, workers with their labor power receive the same treatment.
What happens to workers under a capitalist exchange?
- Workers are given the bare minimum of a wage. - Workers will be unable to grow out of subsistence unless they find a way to produce capital for themselves.
How do workers relate to Capital Production?
- Workers produce capital, not only the commodities themselves because workers produce additional value that is exploited by the employer.
How do wages rise and fall?
According to the relation of... - Supply and demand. - Competition between the buyers of labor-power (capitalists) and the sellers of labor-power (workers).
What is a commodity?
An object outside us, a thing that by its property satisfies human wants of some sort or another, that is exchanged for other goods that have use-value.
Accumulated Labor
Commodities or products that are creations of previous laborers.
How is the price of a commodity determined?
Competition and Competitive Forces within a market.
What are commodities made of?
Consist of accumulated labor in exchange.
Examples of Capital?
Consists of... - Raw materials - Instruments of labor - Subsistence, which is employed in producing new raw materials. - New instruments - New means of subsistence - Capital also includes labor that serves new production.
Which aspects of capital existed before Capitalism?
Consists of... - Raw materials used to produce new raw materials. - Instruments of labor used to produce new instruments of labor. - Means of subsistence used to produce new means of subsistence.
What is Capital?
Consists of... - Raw materials used to produce new raw materials. - Instruments of labor used to produce new instruments of labor. - Means of subsistence used to produce new means of subsistence. - Social relations between capitalists and proletariats. - The sum of commodities (exchange values). - The dominance of accumulated labor over living labor.
Which aspects of capital came with Capitalism?
Consists of... - Social relations between capitalists and proletariats. - The sum of commodities (exchange values). - The dominance of accumulated labor over living labor.
What is The Price of Labor-Power?
EQUAL to the Cost of Production of Labor-Power.
Example of an exchange between the capitalist and the wage-laborer?
Example - - For one shilling a laborer works all day long in the fields of a farmer, to whom he thus secures a return of two shillings. - The farmer not only receives the replaced value which he has given to the day laborer, but he has also doubled it. - He has used the one shilling that he gave to the day laborer in a fruitful, productive manner. - For the one shilling he has bought the labor-power of the day-laborer, which creates products of the soil of twice the value, and out of one shilling makes two.
Relative Wage Example
Example - All means of subsistence have fallen 2/3rds in price and wages have fallen 1/3rd, Profits remain the same. - Although the worker can now get a greater amount of commodities than he formerly did. - Yet his relative wages have decreased relative to the gain of the capitalist. - The capitalist has kept the same amount of profit and now pockets more profits from spending less on labor power. ------------------------------------------ - Under this example, the distribution of social wealth between capital and labor has become even more unequal. - The capitalist commands more labor with the same capital.
Example of Production Costs
If a machine costs 1,000 shillings, and this machine is used for ten years, manufacturers will add 100 shillings annually to the annual price of production to offset the cost of the machine and eventually replace the device with a new one.
Example of Labor-Power(Production) Costs
If a worker's labor-power costs 5 shillings per day, and this worker stays for 100 days, manufacturers will add 5 shillings daily to the daily price of production to pay for the worker's labor-power and eventually replace the worker.
What is profit?
Profit is the stolen surplus value of the laborer.
When will profits grow?
Profits can grow rapidly only when the price of labor - the relative wages (Proportion of worker's wages to/over capitalist profits) - decreases just as rapidly.
How do relative wages behave?
Regardless of any increase or decrease in real or nominal wages, Relative Wages between the capitalist and worker will change regardless of other types of wages.
What happens when sellers compete with each other?
Sellers will sell similar or the same commodities in a MARKET.
What is the replacement of assets and costs? (1st Category)
Simply the total cost of replacing the cost of current assets and costs, including maintenance, tools, machines, and raw materials.
What are the Two Values that DETERMINE the Price of a Commodity?
Supply and Demand.
Who drives demand?
The Buyers.
Nominal Wages
The MONEY price of wages. - Have no bearing on a worker's ability to survive. - No relevance in economics.
What determines the cost and size of wages?
The Price of Labor-Power.
Who drives supply?
The Sellers.
How are prices determined?
The average price of every commodity and the proportion in which it exchanges for other commodities is determined by its cost of production.
How Much is the Cost of Production of Labor-Power?
The cost of production of labor-power amounts to... - The cost of the continued existence and sustenance of the worker while employed under an employer.
What happens when capital grows?
The faster capital grows, the richer the bourgeoisie, the better the business, the more workers the capitalist needs, the greater the need for workers to sell themselves.
What is the effect of greater markets and capital growth?
The greater size, number, and need of workers in the machine will cause even greater suffering, alongside greater variance and unpredictability.
How is capital and wage labor related?
The interests of capital and the interests of wage labor are opposed to each other.
When does capital exist/form?
The main components of capital are useless without certain conditions and rules being upheld. Examples include... - A Negro is a Negro. Only under certain conditions does he become a slave. - A cotton-spinning machine is a machine for spinning cotton. Only under certain conditions does it become capital. - Torn away from these conditions, it is as little capital as gold is itself money, or sugar is the price of sugar. - Primarily, labor is required in bulk to convert most assets into capital.
What happens as capital grows more productive?
The more productive capital grows, the more it extends the division of labor and the application of machinery.
How is capital and profit related?
The rapid growth of capital is synonymous with the rapid growth of profits.
What is the General Law that Determines the Rise and Fall of Wages and Profits?
The selling price of the commodities produced by the worker is divided into three parts: - First, the price of the replacement of the raw materials, tools, machines, and other instruments of labor required for production. - Second, the price of the replacement of the wages provided to workers. - Third, the surplus leftover, the profit pocketed by the capitalist.
How do other capitalists exist in a market of greater capital and profits?
The small manufacturer cannot survive in a struggle in which the condition of success is production grows even larger, as bigger manufacturers take full control of their industries.
What is the general law that determines the rise and fall of wages and profit?
They stand in inverse proportion to each other.
Does labor-power get treated similar to other commodities?
Yes.
Are capital and wage labor connected?
Yes. Capital and wage-labor support each other and each brings the other into existence.