Mud slinging (2026)

From the August 2026 issue of the Socialist Standard

If you ever go on social media sites that discuss Marx, it’s likely that you’ll come across a post that claims to refute/debunk his ideas. One of the common charges against Marx is that his theory of value, based on labour-time, is untenable because not all labour produces value. The evidence for this? The mud pie.

Now it’s true that, however many mud pies you make, however much labour-time you expend on that task, you won’t create any value. So surely, Marx got it wrong…. And if his theory of value falls, so does the entire edifice of Marx’s economics.

But here’s why the mud pie argument doesn’t work. References below are to Capital Volume 1.

First, we ought to remind ourselves that, at root, Marx is dealing with an issue that is key to human existence: the labour process, by which ‘Nature’s material [is] adapted by a change of form to the wants of man’ (chapter 7 section 1), a process which creates useful things, otherwise known as use-values. At a certain time in human history the results of this process take the form of the commodity.

To drive home the point, a commodity is ‘an object outside us, a thing that by its properties satisfies human wants of some sort or another’ (chapter 1, section 1).

When the commodity appears in history, so too does value and ‘Value is independent of the particular use-value by which it is borne, but it must be embodied in a use value of some kind’ (chapter 7 section 2).

Lastly, from chapter 8 ‘Value exists only in articles of utility, in objects’.

The takeaway message: Marx’s theory applies to human beings carrying out productive activity to satisfy real needs and wants, not to a child making mud pies (or sandcastles).

By the way, the people who put forwards the mud pie argument have plainly never even opened a copy of Capital, let alone read or understood it. The only reason for dealing with this infantile guff in the Socialist Standard is that the argument re-appears regularly online, presumably on the assumption that if you keep throwing mud, some of it will stick.

Budgie.

Cooking the Books: Human capital (2026)

The Cooking The Books column from the July 2026 issue of the Socialist Standard

Announcing plans to cut nearly 8,000 jobs by using AI instead, Bill Winters, the CEO of Standard Bank, told reporters:

‘It’s not cost-cutting. It’s replacing in some cases lower-value human capital with the financial capital and the investment capital we’re putting in’.

He seemed to have forgotten that he was not addressing a board meeting but the general public. The resulting outrage at him calling his employees ‘lower-value human capital’ forced him to apologise. But he was actually accurately describing a fact.

What a capitalist firm has to set aside to pay its workers is part of its capital. You could call it ‘human’ capital as opposed to the capital invested in plant, equipment, machines, materials and power.  Or, expressed another way, it is the difference between ‘living’ labour and ‘dead’ labour, useful as it brings out that the other factors that capital is invested in have been produced by people working.

The terms Marx used to make this distinction were ‘variable’ capital and ‘constant’ capital, as set out in chapter 8 of Volume I of Capital:

‘The means of production on the one hand, labour-power on the other, are merely the different modes of existence which the value of the original capital assumed when from being money it was transformed into the various factors of the labour-process. That part of capital then, which is represented by the means of production, by the raw material, auxiliary material and the instruments of labour does not, in the process of production, undergo any quantitative alteration of value. I therefore call it the constant part of capital, or, more shortly, constant capital. On the other hand, that part of capital, represented by labour-power, does, in the process of production, undergo an alteration of value. It both reproduces the equivalent of its own value, and also produces an excess, a surplus-value, which may itself vary, may be more or less according to circumstances. This part of capital is continually being transformed from a constant into a variable magnitude. I therefore call it the variable part of capital, or, shortly, variable capital’.

So the money invested in buying the ability to work of employees is indeed a part of capital. Economically speaking, that’s what workers are and that’s what they are treated as.

Winters claimed that it wasn’t about cost-cutting. Of course it was. What would be the point of investing in AI if it wasn’t cheaper than having the work done by humans? What he was probably trying to say was that the board had decided to use a larger proportion of its capital as non-human capital than as human capital and that some of the latter was of ‘lower value’ to his business because it was costing more and so reducing profits.

He would be really ignorant if he thought that human capital in general was of ‘lower value’ to a capitalist business than non-human capital. The source of profits is precisely the extra value over and above its own value that living labour produces, the amount by which such capital ‘varies’ compared to its original value. But perhaps he was misled because he is running a bank and banks don’t actually produce anything but siphon off a part of the surplus value produced in industry.

The indignation of workers at being called ‘human capital’ brings out a key difference between the two types of capital. Humans can think and act and so can get together to end their economic status as a part of a capitalist business’s capital — by ending the whole economic system where production is in the hands of money-investing, profit-seeking businesses.

Wage-labour v. Capital (1952)

From the April 1952 issue of the Socialist Standard

There was once a story in circulation of Siamese twin brothers who hated one another from birth. Inseparably joined together, their hatred became deeper and more bitter with each inconvenience they caused one another. Either could have willingly killed his brother, but they were joined in such a manner that the death of one would mean the death of both. One could not exist without the other.

Thus it is with wage-labour and capital. Born together, they are inseparable yet they are antagonistic. They are complementary yet they are perpetually in opposition to one another. They strive strenuously against one another but the abolition of one means the end of both. Neither can exist without the other.

Capital is wealth that is invested for the purpose of producing further wealth with a view to profit. The process requires the bringing together of raw material, machinery and human effort. The capitalist owns the raw material and the machinery but the human effort he must obtain from the workers. He needs to obtain and use it in a particular manner—a manner known as wage-labour.

There have been other forms of labour in the past. There was once free labour, then slave labour and serf labour. These different forms served certain conditions but are useless to capital.

In very distant times men lived under social conditions now known as Primitive Communism. Under those conditions they worked with their very primitive tools to produce things in order that the whole community might use them. There was no question of profit, no question of some working to produce for the benefit of an idle section of the community. All who were capable assisted in the tasks of obtaining and preparing the things that were necessary to feed, clothe, house and maintain them all. They thought not of things as “Mine” or “Yours” but as “Ours—the property of us all.” Those conditions of labour were free. They are obviously useless to the capitalist who seeks only profit and relies on others to produce it.

Slave labour followed. This was a system where one section of the community owned, body and soul; lock, stock and barrel, a number of others—owned them and worked them as slaves. They had to feed them, clothe them and shelter them, whether they were working or not. Such conditions required, for the slave owners, that as far as possible there should be regular and constant work to be done so that they did not have to maintain slaves who were idle and temporarily useless to them. Their main problem was whether it was better to get slaves and work them to death and then get others, or whether it was cheaper to treat their slaves with some little consideration so that they had a long working life.

To the capitalist this form of labour is equally useless. He requires to be able to employ his labourers and dismiss them just when he has need. The wealth that his workers produce for him must go to a market and the condition of that market is unpredictable. The capitalist may have orders to fulfil to-day that may be doubled or may cease altogether to-morrow. He needs to get his labourers to suit his orders, some to-day, maybe more to-morrow and perhaps sack the lot the next day. He wants his labour power in the same way that he wants his electricity, switch it on when required and off when not required. He does not want the expense of wasted electricity, neither does he want the expense of maintaining labourers for whom he cannot find work.

The capitalist does not want the initial expense of buying his labourers, as slaves were bought. It would enormously increase his capital outlay, and replacement would be a costly business. This point is adequately illustrated by the story of a man who paid £100 for a negro slave and sent him to work painting a roof. The slave turned to his master and said, “ Massa, if you send me on to that roof and I fall and break my neck you will be £100 out of pocket, but if you go to the city and get some of that white trash for sixpence an hour and he falls and kills himself, all you have to do is go and get another one without losing a penny.”

The capitalist does not want to be bothered with the carcasses of his employees, all he wants is the energy that they contain and he only wants that when there is profit to be made.

Serf labour is of a different order. The serf is not bound to his master but to the soil that his master owns. The serf has his piece of land, no matter how small or poor, and he produces things for use, a little for himself and family, and the rest for his overlord. He may also give his overlord some of his working time to till the lord's crops or to defend his domain. The serf owns some of the tools that are needed to produce his food, clothing and shelter, and he owns a little raw material—the land on which he works. But he is chained to the soil. A change of overlords leaves him on the same ground working on behalf of the new lord. To the overlord the land is useless without the serf and he assumes certain obligations to his serfs, as they assume certain others to him. The lord, of course, gets the fatter living whilst the serf struggles in poverty.

This, likewise, is useless to the capitalist. He does not want his workers chained to any particular place. They must come to the work, he cannot take the work to them. The factory, the mine, the workshop, the garage, the depot, the dock, the warehouse or whatever sort of place the capitalist owns is the spot to which the worker must be free to come.

Neither does the capitalist want his workers to have the slight amount of independence that a piece of land, such as the serf had, would give them. The capitalist cannot afford to have his machinery held up because some of his workers have taken time off to get in their hay or their potato crop or to thatch a roof. The worker must be entirely dependant on the capitalist for his livelihood so that he can be disciplined into punctuality, regular attendance at the place of work when required, and respect for his employer’s wishes. He must be conditioned by the job without outside interference. Absenteeism and insubordination that might flow from a little independence are a curse to the capitalist. So serfdom does not suit capital.

The capitalist needs wage-labour. He wants not the worker’s body but his energy, mental and physical. Mental and physical energies are inseparable. There is no physical work that does not call for thinking and no mental work that does not entail some physical effort even if it is only pushing pen over paper. The capitalist wants this energy on tap and he wants it to be completely at his disposal. Wage-labour offers him all that. The worker seeks employment, he offers for sale his bodily and mental energies for a price. That price is the wage. It may be called a salary, an income, a fee, a stipend or what you will, it is the same thing. The capitalist can employ the wage-labourer or not, employ him today and put him on part time or sack him tomorrow; tell him what time to come to work and what time to go; tell him how the work shall be done and take from him the wealth that he produces.

The capitalist also likes to have a reserve of labour power from which he can draw when his business requires it. If there is no such reserve and he needs extra wage-labourers he must compete with his fellow capitalists for workers by offering higher wages, a process that is distasteful to the capitalist class. Efforts are made to create a larger army of wage workers or build a reserve in some way.

When capitalism first appears in any part of the world wage-labour appears with it. One of the capitalists’ first worries is the creation of a reserve of wage-labour. In most countries this problem was originally solved by taking away from the serf, or the peasant, the land that he owned. This made him propertyless—-a proletarian, and drove him into the ranks of the wage-labourers to seek employment from those who did own property. The hundreds of enclosure acts on the statute book of this country are evidence of the ruthless process of dispossessing the English serfs and peasants. Their land was taken and enclosed by fences to be used largely as sheep grazing land, large hunting parks or for large scale agriculture. The poor landless families wandered to the towns where the factories were, there to operate machines that made woollen goods from the sheep that now wandered over the site of their late homesteads. The reserve army of wage labour, in those days, included small children, the aged and the infirm, as well as women.

The reserve army now-a-days is maintained by drawing more and more women into the wage-labour category. Labour saving machinery is introduced to enable one man to do the work that was previously done by two. The redundant men help to fill the ranks of the reserve of wage-labour, to be drawn on when occasion may demand.

If capitalists have to compete with one another for a limited supply of wage-labour and the price tends to rise, they howl “blue murder.” They will use their political power to freeze wages, bind the worker to his job or direct him to another. They have even conscripted women to the wage-labour ranks. The competition between capitalists for the limited markets wherein to sell the goods that the workers make, results in the accumulation of capital into fewer and fewer hands and the bankruptcy of the weaker capitalists, who then go to join the swelling ranks of the wage-labourers.

If capital needs wage-labour, so does wage-labour need capital. Whilst there are men and women who own nothing but the energy contained in their bodies, they must, in order to live, have access to the tools of production and the raw materials to work on. Whilst these things are in the hands of capitalists the workers must go to them for permission to use them. Unless the capitalist is prepared to invest these things in some profit making enterprise, the workers can starve.

Yet, despite needing one another so desperately, wage-labour and capital fight tooth and nail. The capitalist seeks always to increase his profit which means that, out of the total wealth that the workers produce, he seeks to increase his share. The larger the capitalists’ share, the smaller the workers portion.

To increase his profit the capitalist tries to cheapen the price of wage-labour, increase the price of goods to be sold or reduce the amount of wage-labour used. All three of these methods are detrimental to the wage worker. In the first instance he gets lower wages, in the second his wages will buy less because the price of commodities will be higher and in the third case, the introduction of labour saving machinery or the reorganisation of an industry will cause some workers to have their work intensified whilst others can be idle if they cannot find another employer. So the wage-labourers resist the capitalist’s attempts to increase his profit.

The wage-labourer also seeks to increase his part of the total wealth produced. He strives for higher wages. Things that were originally luxuries become comforts and finally necessities. To be able to read and write was once an accomplishment for the wealthy only, now it is a necessity for the humblest wage-worker. A Sunday suit of clothes, holidays, passenger transport were once luxuries and are now very essential needs. Radio has passed the luxury stage and can be considered a comfort, in time to be a necessity. These things become essential for the workers who seek to increase their wages to enable them to acquire these new needs. Variations in the price of things that have long been established as essential needs—food, houses and clothing, cause the worker to seek to adjust his wages whenever the variation is upward. The capitalist will put on the pressure to cheapen the price of labour-power when the variation is downwards.

So the two, wage-labour and capital, are continuously locked in a ding-dong struggle. The worker will find the capitalist’s discipline irksome and he will organise in a Trade Union in an endeavour to have a say in the conditions under which he is to work. The capitalist will have to resist again. The capitalist will jealously guard his trump card, the political weapon, and use it when the workers become a little too audacious.

The worker sells his labour power either by time or by amount. When he sells it by time he receives a wage rate calculated by the hour, day or week. He strives to reduce the amount of time over which he sells it by struggling for a shorter working day or shorter working week, whilst maintaining his total wage at the previous level. The capitalist, on the other hand, endeavours to increase the working time without a wage increase, thus gaining for himself a larger share in the total wealth. When labour power is scarce he will increase the total time by demanding overtime work and he will pay for such time at special rates, still ensuring himself a profit.

When the worker sells his labour power by the amount it is known as piece work. Here he is paid, not by the measure of time but by the quantity of wealth produced in a given time. This urges him to intensify his work by working as hard and as fast as he can in order to increase his total wage. Now-a-days piece work is referred to as "payment by results" or "incentive bonus.” The effect is to squeeze the maximum amount of energy out of the worker in the minimum amount of time. This is most useful to the capitalist when the market is good and orders are flowing in rapidly, when he is competing with other capitalists to get goods to the market in the shortest possible time. Piece work is often a prelude to a re-adjustment of time rates. Having enticed the worker to betray just how fast he can work he is then called upon to work at that pace for a time measured wage.

All these points are the issues which keep wage-labour and capital perpetually at war with one another.

There are some features of wage-labour which resemble slave-labour. So much so, in fact, that it is often referred to as wage-slavery. Although the capitalist only requires the workers energies he cannot have them separate from the body which generates them. The worker cannot rise in the morning, extract a quantity of labour power from himself, wrap it and send it to his employer with a stamped addressed envelope, then return his body back to bed with a pipe and a book. The worker must, himself, go to his place of employment and have his labour power extracted by the day, hour or contract. So, during his periods of work, the wage-labourer appears to be owned by the capitalist.

In this relationship of wage-labour and capital the advantages are all with the capitalist. He gets the wealth and the privileges whilst the worker's lot is one of continual work in order to live, coupled with which are his poverty and the insecurity of livelihood. Capital is his enemy. If he destroys capital he destroys wage-labour also, but he does not destroy himself or his ability to labour.

The problem has a simple solution. Having no property the worker must work for a wage in order to live. The capitalist has the property and can employ the worker. Take away the capitalist's property and place it in the possession of the whole of the people and there will be neither propertyless wage workers nor property owning people who can command the labour power of others. Labour remains; so do the raw materials and the machines, but the labour becomes free—free to produce wealth in order that everyone may enjoy it. No wage-labour, no capital, no profits, no markets, no wars to capture markets, no class domination, no classes. Instead, a classless society working to produce the needs, comforts and luxuries of life and having all things available when produced.—Socialism.

One thing is clear. Where there is wage-labour there is capital, and where there is capital there is capitalism. Some would have us believe that capitalism has been abolished in some parts of the world. To test the truth of this is easy. Do the people work for wages? If so, there is capital, and capitalism is the same all the world over. Society will be well rid of both wage-labour and capital.

W. Waters

Letter: Workers and wages (1977)

Letter to the Editors from the April 1977 issue of the Socialist Standard

Workers and wages

In the January issue of the Socialist Standard appeared an advertisement for a meeting at the Roebuck pub on "Marx and the Abolition of the Wages System”. When I saw it I was eager to go along and hear what was to be said. But instantly I was deterred. Not because as is the usual case where visitors are sneered upon and used as chopping blocks, but just simply the title of that meeting.

The title is a 100 per cent. give-away. What one should be concerned is what does one do now, once they have a Marxist understanding of economics. If we say to ourselves:—I am a worker. I’ve been told by the SPGB that the wages system denies me the full fruits of my labour (sorry! labour-power!). So what shall I do? Pack up my job, rob banks, start up a stall in Portobello market, go burgling, start militant trade union activity. What? What?

The most vital point and question is “What do I do with my Socialist understanding of economics in relation to my economic struggle now? How can I use such knowledge? But will actions following from the same make a gap between me and my fellow Socialists?" These sort of aspects could be described for the want of a better word as psychological (Marx and Engels made use of the word).

While on the question of the wages system, what is the attitude of Socialists to the wage-price mechanism, where if the cost of living goes up 10 per cent then instantly wages go up 10 per cent, either above the trade union rate or the non-trade union rate, without cutting down the numbers of the work force? If the employer (capitalist) decides or has to put his price of goods up, surely he will think twice as he would immediately have to increase the rate of wages; this he wants to avoid. Surely this would greatly narrow the gap between price of consumer goods and rate of wages? Remember one must deal with things comparatively as well as relatively and fundamentally.

D. Brooks

London W9.

Reply:

A pity you did not attend that meeting. Apart from discovering that visitors are not “sneered upon and used as chopping blocks” (we want to make members, not drive them away), you would have heard your first question answered.

It does happen that workers half-grasp that they are exploited and react in the ways you mention: “dropping out”, attempting crime, engaging in futile militancy. As individuals there is nothing workers can do to escape from the wages system and exploitation. If there were, the working-class problem would obviously not exist. But full understanding of it opens the way to the only effective activity, participation in the conscious movement to get rid of capitalism. There is then no gap between you and others of like mind—on the contrary, a strong bond is found; and from the psychological viewpoint you mention there is great personal satisfaction in working for the only worthwhile cause.

Your second question, if we have understood it correctly, is on the following lines. Capitalist A raises his prices, causing the workers employed by capitalists B, C and D to apply for wage increases which contribute to higher costs for their employers’ products, hence higher prices; and capitalist A’s workers in turn making wage demands . . . surely, you ask, it would be better if a kept his prices down to start with?

This might have some validity if capitalists thought in such a comprehensive fashion. They do not because they cannot—each has to pursue his, or his company’s interests and let the others look after their own. Moreover, each proprietor of the means of production and distribution wants the others’ workers to have money. They are his customers; it is only his own workers whose wages he wants to keep down. Marx remarked on the idea of thrift in this light:

Incidentally . . . each capitalist does demand that his workers should save, but only his own, because they stand towards him as workers; but by no means the remaining world of workers, for these stand towards him as consumers. In spite of all ‘pious’ speeches he therefore searches for means to spur them on to consumption, to give his wares new charms, to inspire them with new needs by constant chatter etc.

(Grundrisse, p. 287)

By the way, you are mistaken in saying that a ten per cent. rise in the cost of living is instantly followed by 10 per cent. wage increases. At the present time, prices are rising at 15-20 per cent a year while wages are restricted to about half that figure.

Editors.

Letter: Explaining Wages (1976)

Letter to the Editors from the April 1976 issue of the Socialist Standard

Explaining Wages

Socialists know the Marxian labour theory of value: that wages is the price of labour-power or cost of production of the one commodity that overproduces itself, i.e. the ability to work and create useful things.

But how is the figure of £10,000 and upwards a year for managerial class arrived at? Directors’ fees and in several companies at once, many of them absentees, and golden handshakes on retirement or redundancy?

Is their cost of production so steep or is it that the working class having produced such a vast amount of surplus-value it must be squandered on useless luxury for the few?

Harold Shaw

Tetbury

Reply:

As you point out, labour-power is a commodity and wages are its price. Price is the monetary expression of value, i.e. it indicates the amount of labour-time embodied in a commodity, and this applies to labour-power as to everything else. Wages correspond, in general, with what it takes to produce, maintain and reproduce particular kinds of workers.

Some workers’ labour-power is a relatively cheap commodity. It requires the minimum of education and training, and does not need to be sustained by a high standard of living. Other workers sell a comparatively more expensive product. They have had to acquire special skills or knowledge, perhaps be educated much longer; it is expected that they should live fittingly and that their children be schooled for a similar future. This is the difference between wages of £2,000 and £10,000 a year.

The price of labour-power can be affected, in common with other prices, by supply and demand. Another factor is the strength of trade-union organization in particular industries and professions and its success in getting wage increases under favourable conditions. Higher-paid workers are not a separate class and are as much at the mercy of the wages system as the rest. In recent years executives and managers have been losing their jobs, having to change the life-style they may have thought was divinely ordained for them, and going to the Social Security office.

Directors’ fees are a different matter from wages. Since changes in the taxation laws made “unearned income’’ subject to heavier tax rates, it has become the practice for capitalists to have nominal occupations of which “director” is the most common one.

Editors

The Town and Country Planning Bill (1947)

From the March 1947 issue of the Socialist Standard

“A man will no longer be able to buy farmland at £200 an acre in the hope of reselling it as a factory site at £600 an acre. True, it will be worth more as a factory site—but the State, through a Central Land Board, will collect all or most of the difference” (Daily Herald, 8/1/47).

Thus the Labour Government carries out a longstanding demand made in the interests of the industrial capitalist. H. M. Hyndman, in his “Economics of Socialism,” dealt with this. After reviewing the Ricardian theory of rent and the many objections which present themselves to that theory, he wrote: —

“It seems, therefore, that a wider definition of the rent of land under Capitalism is needed than that, given by Ricardo, and the following is suggested: Rent of land is that portion of the total net revenue which is paid to the landlord for the use of plots of land after the average profit on the capital embarked in developing such land has been deducted.”

On the question of confiscating rent he pointed out that it “would not affect the position of the working portion of the community unless the money so obtained were devoted to giving them more amusement, to providing them with better surroundings and the like. . . . In fact, the attack upon competitive rents is merely a capitalist attack. That class sees a considerable income going off to a set of people who take no part in the direct exploitation of labour; and its representatives are naturally anxious to stop this leakage, as they consider it, and to reduce their own taxation for public purposes by appropriating rent to the service of the State. That is all very well for them.”

On this point Marx says: —

“We can understand such economists as Mill, Cherbulliez, Hilditch, and others, demanding that rent should be used for the remission of taxation. That is only the frank expression of the hate which the industrial capitalist feels for the landed proprietor, who appears to him as a useless incumbrance, a superfluity in the otherwise harmonious whole of bourgeois production.” (“Poverty of Philosophy,” Kerr edition, 1920. Page 176.)

“Rent,” says Marx, “results from the social relations in which exploitation is carried on. It cannot result from the nature, more or less fixed, more or less durable, of land. Rent proceeds from society and not from the soil.” (P. 180.)

(The above quotations are used by H. Quelch in his Introduction to Marx’s “Poverty of Philosophy,” Kerr edition, 1920.)

Horatio.

Revolution’s Reply to Reform. (Part 3) (1910)

From the February 1910 issue of the Socialist Standard

The answer to “Arms for the Workers: A Defence of the Programme of the Social-Democratic Party.” (E. C. Fairchild, Lon. Organiser, S.D.P.)

(Continued from previous issue)

Those who talk so glibly of Minimum Wage enactments cannot, surely, have paid due attention to the manifold ramifications of the competitive mainspring of capitalist production. Even if such an act could, in spite of all the powers against it, be carried into effect, still the be all and end all of capitalist production—profit—would not consent to defeat.

Stronger than Parliaments and the laws of Parliaments, than the colossal armed forces of nations in the hands of Parliaments, are the economic laws. So, if political law affects to limit the degradation of wages, the economic law of machinery under capitalism comes into operation and restores the degree of exploitation.

The law may be stated thus: Every increase in the cost of labour-power tends to the increase and development of machinery.

Many who are not ignorant of this law refuse to accept it because they do not thoroughly grasp its meaning. They argue that Necessity is not so much the mother of Invention that every need of the capitalist class is at once productive of the inventive genius to satisfy it. But such an argument shows a wrong interpretation of the law.

Machinery exists and plays its part in every productive field. But it is in no trade or industry of even perfection throughout. Its development at any given date is a matter of innumerable gradations and degrees. To take an example—the newspaper printing trade. Not every newspaper is printed on the latest “Hoe” machine flashing off 40,000 copies folded and counted in an hour. From this the means in use tail away, through numberless shades of backwardness, into comparative antiquity. But everywhere the means are being used which the individual proprietor judges are most profitable to him, in his circumstances. Thus though the latest “Hoe” marvel is of undoubted value, the machine of fifty years ago still clanks on its way to the scrap-heap.

Each improvement in machinery may be likened to the effect of a stone thrown into a lake. Its circle of profitableness gradually enlarges with time while the degree of its profitableness decreases until it has become too obsolete to yield profit to anyone. In one circle the invention of the hour is eagerly seized upon, in another circle the means of yesterday are most profitable, while yet a third circle of exploiters are limited to the machinery of five years ago, and so on. And everywhere there are owners debating with themselves the question, of whether it would pay them to throw out certain machinery and replace it with something more up-to-date.

Now—to revert to our example—what will be the result of an increase in the cost of labour-power in the case of the newspaper printing trade ? Wages having advanced, the arguments in favour of the further adoption of wage-saving machinery are at once increased. The waverers become decided and the fringe of doubt takes a larger circumference. Each stage of perfection in machinery experiences a rapid extension of its sphere of profitable exploitation, and throughout the whole industry, without the aid of a single new invention, machine development takes a step forward. At the same time at the top of the tree the capitalists are more receptive of new inventions, while at the bottom those who have been struggling to hold their own with antiquated means, are plunged into ruin by the fresh handicap of dearer labour-power, their machines find their way to the scrap-heap, and the work which those machines had been doing with extravagant expenditure of labour-power is transferred to more economic machinery, to the enhancement of the army of out-of-works.

Thus together with the introduction of improved machinery we get displacement of workers and an increased army of unemployed to struggle against any artificial restriction of wages, to defy every penalty with which the most sincere advocates can hedge about the Minimum Wage or any other limitation of the starving multitude’s liberty to compete for work at any price.

It is a fruitless argument to say that the advance of wages demanded by such a “palliative” as the Minimum Wage would be too small to have this general effect. Such a claim cuts against its user, for a reform does not become more worthy on account of insignificance. Moreover, the measure of its extent is the measure of its effect.

And in those trades in which such an Act would most apply—the so-called sweated industries (as if there are any industries which are not sweated) ; the industries which lend themselves to being carried on in the homes of the workers—the law of machine development would operate with two-fold force. In such fields machinery and the factory system are only kept at bay because labour-power is so terribly cheap. Yet, awful as it appears to say it, any legislative attempt to raise the wages of these poor creatures can only, as far as it is effective at all, result in handicapping them against their merciless competitor, machinery.

In a later section Mr. Fairchild talks of initiating measures to deal with the consequences of the “initial proposals.” The consequences of the “introduction of a law of minimum wage,” supposing that it could be effectually enforced, will be the extension of machinery and increased unemployment. When our reformer convinces us that he has a measure capable of dealing with this obliterating “consequence” it will be time enough to agree with him that the share of the total wealth production taken by the working class can be caused to rise by wage legislation.

The Position of the Working Class.

In the next four sections our author abandons all serious effort to deal with his subject, and indulges in a little quiet fun at the expense of his readers. He tells us, for instance, that “we do not know the things we cannot see.” The blind man, then, doesn’t know when he is hungry. Can it be also, that our reformer knows nothing of economic laws because he cannot see them ? Then an exuberance of spirits leads our opponent to have a fling at those who argue that the enactment of the palliative proposals retards the realisation of Socialism. And this is how he proves his case:

“The outcast may complain in whining minor tones while he stands shivering on the wind-swept Embankment, but a basin of soup, shared with cabinet ministers in court dress, is enough to make him suspend criticism of the social system.”

He gets a good hold and swings his opponent clean off his feet, yet when the fall is consummated our S.D.P. champion is underneath. For the starving wretch at least complained until they shut his mouth with the palliative basin of soup, after which the social system was above criticism and, presumably, Socialism was retarded.

But the greatest joke of all is that Mr. Fairchild deludes his readers with the section heading ,”The Position of the Working Class,” and then, fails to give them any information upon the subject. As a proper understanding of the position of the working class is essential to the intelligent consideration of the “palliative” question, the omission must be rectified.

The working class is the class which works for wages. Wages represent food, clothing and shelter, therefore, it may be said that the working class is the class which works for food, clothing and shelter. To give this definition is to imply that there is a class which does not work for these things. Now as a man may not always be able to work, while he must always have the necessaries of life or he must die, it is obviously of advantage to him that work, and food, clothing and shelter should not hang together, in other words that his living should not depend upon his working.

While it is true that man, as a natural order, cannot live without labour, that very truth tells us that if one class does not work for its living, it must subsist upon the product of the class which does work. So we get the first two conditions of the working-class position—it is the class which works for its own living in the first place ; it is the class which works for the living of the non-working class in the second place. What is the reason of this double disadvantage ?

If it is disadvantageous for a man’s livelihood to depend upon his working it is doubly so for him to have to labour to support others. Why does the worker do it, then ? Why, in the first place, does he not do as the non-worker does—live without labour? Why, in the second place, does he not produce food, clothing and shelter for himself alone ? Why, in the third place, does not the non-worker do the same as the member of the working class—work for his living ?

Those things which we indicate by the term livelihood, all come in the category “economic wealth.” Wealth (we must be understood to use the term in the economic sense) is natural objects which have been changed in form or rendered accessible to man by the expenditure of human labour-power. The fish of the sea is not wealth until it is caught—it is not caught without labour. Therefore the two essentials in wealth production are the natural objects and human labour-power.

No man or class, then, can produce wealth without command of or access to these two factors. Have the workers this access to the means of wealth production ? We know that (save through permission) they have not, for though they have one essential—labour-power—the source of the other essential—the natural object—is the land (or water) and the land belongs to others. We find the answer to our second question first. The working class cannot produce wealth except upon terms, because the land and—what are quite as necessary to the process in these days—the machinery of production and distribution, are held by a class.

We now learn concerning the position of the working class, that it is one of subservience to the class which hold the means of life ; and this further—that as the question of the terms upon which the workers can get access to the means of production must be referred to continuous struggle, their position must necessarily be one of opposite interests to that of the possessing class, and therefore of antagonism. In other words, their position is clearly that of one party to a class struggle, which must continue as long as there are opposing class interests, as long as one class stand between another class and their means of living, as long, finally, as private ownership in the land, factories, machinery, mines, railways, and the like shall exist.

Now what are the terms upon which the workers are permitted to use the machinery of production ? Common experience, that fount of all our knowledge, teaches us that the terms are the surrender of their labour-power in return for wages. With the product of their toil they have nothing to do—that remains with the purchaser of their labour-power. So far the worker has obtained his living, but how has the non-worker materially benefitted ? If the value of the product of labour which is left in his hands is no greater than his expenditure upon it has been, it is very clear that he has had no material gain from the fact of his dominance of the means of life, and upon such result he cannot maintain his position as a non-worker. We must therefore look for increased value in the product of the worker’s toil.

Working-class economics teach us that what really happens is this. The master or capitalist purchases labour-power and raw material (natural objects to which labour-power has been applied), and expends the former upon the latter. The labour-power, once expended, has ceased to exist: it has been transformed into labour, stored up in the material upon which it has been expended. To say that its value has entered into the latter is not the whole truth. It has undergone change, and this fact is of vital importance. When the capitalist purchased raw material he really only paid for the stored up labour within it. The actual substance of it did not count. He therefore purchased on the one hand labour (stored up in the raw material) and labour-power (stored up in the body of the labourer). Now that the labourer has expended his strength or labour-power, neither he nor the capitalist longer possesses it, but the latter possesses an increased volume of human labour accumulated in the material of the natural object.

The only difference, then, in the position of the capitalist at the time of purchasing labour and labour-power and now when the power has been expended, is, then he owned two factors—labour and labour-power—while now he owns but one—congealed labour. Yet if he is any better off, any richer or more able to live without working, the why and the wherefore must be sought in this conversion of labour-power into labour.

If a labourer by consuming one loaf of bread could gain therefrom only sufficient labour-power to produce another and equal loaf of bread, there could be no increase of value. It is quite imaginable that given sufficiently primitive means of production, no better result could attend human effort. In that case there could be no non-working class. But if the means of production improve so that the labourer by consuming one loaf generates sufficient power to produce two loaves, then an increase of value becomes possible.

Herein is the whole secret of the source of capitalist wealth. Labour-power is purchased for what it costs to produce. The energy produced by a loaf of bread is bought for wages equalling a loaf of bread (we must take broad averages, of course). It cannot be bought for less, for the labourer must have the cost of production of his labour-power in order to reproduce it and continue in working efficiency. It will not (in the long run) sell for more because machinery provides an unemployed army and the competition of these keeps wages down to this level. But the labour-power created by one loaf produces other loaves in number according to the development of the machinery of production.

If then, the consumption of a loaf by the labourer results in labour-power sufficient to produce two loaves, which the capitalist buys for one loaf, the exploitation of that labour-power leaves the latter with two loaves instead of one. He has succeeded in getting the means of life without working for them—simply by virtue of his power of keeping the worker away from the productive machinery save upon terms. These terms give to the capitalist all the difference between the value of the labour-power and the value of its product—between the one loaf which it cost the labourer to produce his energy and the two or more loaves which that energy in turn produces.

The cost (reckoned in amount of sustenance) of producing labour-power remains pretty constant. A pound of wheat generated very much the same quantity of physical force a century ago as to-day. The value created by labour remains exactly constant, for labour is the measure of value and, notwithstanding the improvement in machinery, the product of an hour’s work a hundred years ago was the same value as the product of an hour’s work to-day—in each case the value is an hour’s labour. The difference, however, between the cost of producing labour-power and the productive capacity of labour-power increases with the development of machinery, and this increase has an important influence upon the position of the working class.

If the wages of the labourer equal one loaf and his product two,, he will be able to buy back one loaf, while his master may presumably consume the other. In such case the services of the former are needed to produce bread the next day. But if by the improvement of machinery the worker is able to add to existing value (raw material) not only the loaf represented by his wages and the loaf consumed by his master, but an additional loaf, then his services can be dispensed with until that loaf is disposed of ; in other words he has produced too much and may become-unemployed. Apply this to the whole field of industry, and it is seen that every advance of the productive machinery heaps up against the workers a greater burden of “surplus” wealth to “slump” the market and throw them out of work ; that the increasing fertility of human labour renders more precarious and more hopeless the position of the working class.

From what has been said it is apparent that the development of the industrial process, ever rendering human labour more productive, ever increasing the difference between the cost of producing the workers’ efficiency and the productive capacity of that efficiency, ever heaping up against the worker a larger share of his own products which wages will not enable him to consume, draws ever clearer and firmer the line between the two classes. The development of productive instruments means increased wealth for their owners and increased poverty for those who, as a class, operate them. Here is antagonism of interests. Here is war to the knife. ]t shows itself in the banding together in trade unions, in myriad strikes and lock-outs, and in the universal endeavour of the workers to-limit output.

The position, then, of the working class is, on the economic field, fundamently one of opposition to the master class. As material interests must be fought for or surrendered, there must necessarily eventuate from these opposing class interests a class struggle. Such a class struggle, we affirm, exists. It cannot remain a struggle on the economic field for terms, for the laws arising from the productive system prescribe those terms and decrees such a struggle hopeless to the workers. Their only hope, then, is in a new system—the Socialist system. Towards this end the class struggle must be directed.

And the recognition of this class struggle is the first essential to its intelligent and successful prosecution.

A. E. Jacomb

(To be Continued.)

Revolution’s Reply to Reform. (Part 4) (1910)

From the March 1910 issue of the Socialist Standard

The answer to “Arms for the Workers: A Defence of the Programme of the Social-Democratic Party.” (E. C. Fairchild, Lon. Organiser, S.D.P.)

(Continued from previous issue)

On a Workingman’s Wages.

Under the above heading Mr. Fairchild tells us that the third objection usually preferred against what he is pleased to call a Socialist programme is that some of its proposals would decrease the cost of living and result in lowering wages to the detriment of the working class. He says that this objection is generally advanced by “those who claim some acquaintance with economic science,” and declares that it “depends upon confusion of the amount of money the employer pays to the workman as wages with the amount or quantity of goods the workman can purchase with that money.” The confusion, however, is with our critic, for when we claim that some of the proposals would cause wages to fall, we do so in the full knowledge of the fact that “The food, clothing, or other things which the workman can obtain for his money” (i.e., wages) “is the real wage paid to him for his labour.” Nevertheless, if the money wage falls and buys less “food, clothing or other things,” the fact remains that “real wages” have fallen, and this notwithstanding that the deficiency is made good by a dole from “the municipal authority or the Government.” An argument which the revolutionary puts forward to show that the workers can be no better off for the so-called palliatives, is met by this bolster of capitalist politics with the retort that they will be no worse off ! What a defence of the palliative programme of the S.D.P. ! What a justification for this modern wandering in the arid Desert of Gobi, that after all the toil and travail of shifting a portion of their cost of maintenance from their employers’ pay-bill to the municipal alms box the workers are no worse off ! Such a defence is a complete surrender to our contention, yet the defence goes no further. An attempt is made, it is true, to exploit the eternal “if,” but the result is ludicrous. “If,” says Mr. Fairchild,

“the money wage paid by the capitalist should fall by 5s. weekly, and the municipal authority or the Government provided the workman with goods or services to the value of 5s. weekly, the workman would not suffer any hardship. If the municipal authority or the Government supplied him with goods or services worth 6s. weekly, the workman would gain, though his wages fall by 5s.”

If, if, if. But if the result of the “palliative” (in this case the “goods or services” supplied by the municipality or Government) is a fall in wages because it cheapens living, it is clear that the effect will be measured by the cause—in other words 6s. worth of “palliation” will be followed by a wage reduction, not of 5s., but, of 6s. There was no logical position for our reformer between absolute denial of the cause and full surrender to the effect, and when, he states that the “third objection” is due to confusion of money wages and “real” wages, and that the loss in money wages is compensated by the dole, he accepts the argument of the cause and effect, confesses that his only defence against the “third objection” is that workers are no worse off, and so doing surrenders, with the worst grace he can, to our contention that they are no better off, and that their efforts have therefore been in vain.

And Englishmen’s Homes.

The burden of this section is the housing problem. The proposal seems to be to provide the employers with homes for their workers at the expense of the landlord class. It is like the horse siding with his master in a demand for a free stable. But as our author says at the end of his previous section : “the source whence the workman draws his maintenance is a matter of no concern at all. The vital thing is that he gets maintenance.” It is a matter of no concern at all to the workers who pays “the cost of the land . . and also the interest payable to the lenders from whom the housing authority borrowed.” Such charges are in the same category as taxes, which even S.D.P. literature proves are not paid by the working class. The maintenance of the workers as a class in a certain average degree of health and strength and efficiency is the first and indispensable charge upon the wealth produced by the workers. It is the vitally necessary condition without which the workers’ power to produce wealth must cease. This degree of efficiency is determined by the degree of development and general conditions of production itself. The housing problem, then, is a problem for the master class. It is an important part of the problem how to provide the necessary maintenance of the workers with smallest possible call upon the latters’ total wealth production. For the rest it becomes a tussle between the industrial capitalists and the landlords for the plunder of the fruits of the workers’ toil. It is for this reason we find certain sections of the master class proceeding with municipal housing schemes and other sections opposing.

“If the money wages of labour were to fall by a sum equal to the reduction in rent—a decrease only possible if municipal housing was of stupendous magnitude . .” next says the S.D.P. oracle. It appears then that we can have too much of a good thing—even of an S.D.P. “palliative”—and that the time may come when we shall find the reform mongers anxious to get elected to undo their own handiwork, to keep wages from falling by preventing municipal housing attaining “stupendous magnitude.”

It would be interesting to know exactly what “stupendous magnitude” means. Where is the line to be drawn beyond which the reform cannot go without affecting money wages and why ? If one municipal house, through its reduced rent, does not affect wages why should ten ? If ten do not why should a hundred ? If a hundred do not why should a thousand, or ten thousand, or a million ? What is there in the last that is not contained in the first ? Nothing. The difference between one reduced rent and a million reduced rents is simply the difference between one and a million—a quantitative not a qualitative, difference—a matter of multiplication. Hence the effect of a million reduced rents can only be the multiplied effect of one reduced rent. This talk of the wage-reducing effect of certain “palliatives” only operating when the proposals become general, or “of stupendous magnitude” is rubbish, and comes fittingly from those who magnify a few municipally reduced rents into an important increase of “the amenities of the workers’ lives,” because they can see those reductions, but cannot understand an exactly equal and equally insignificant wage reduction because, as our author very felicitously puts it, they cannot know the things they cannot see.

One municipal house in every thousand houses in the London area would mean about a thousand municipal houses. We will not ask Mr. Fairchild if such a ratio would be of “stupendous magnitude.” A two-shillings per week reduction of this thousand rents is a visible movement, because it is concentrated. If it resulted in an equivalent reduction in money wages of the actual tenants of these houses, that would be a visible effect. It would be two shillings a week off the earnings of each tenant if there was one tenant to each house. But if this wage reduction, instead of affecting merely the actual participants in the reduced rents, were spread over all the wage earners of the area, it would mean less than three farthings—not per week but—per annum reduction to each. Of how much more “stupendous magnitude” must this become before our “palliator” can see and therefore know it !

Luxuries a Necessity.

The “mixed thinking” of the reformer is shown by our opponents’ remarks under the above heading. First declaring that “the supply and demand for labour regulates the wage that is paid,” he proceeds to flatly contradict himself in the words : “the employing class . . conspires to fix wages at a price sufficient to maintain the physical efficiency required for the production of average profits, . . .” Wages are the price of labour-power, hence to speak of the price of wages is to speak of the price of a price—which is idiotic jibberish. Again, to regulate a thing is to control its movements, therefore that which is regulated is not fixed. Still again, to attribute control of wages on the one hand to competition, in the labour market and on the other hand to conspiracy by the masters is taking idiot’s license, to say the least. Two flat contradictions and a lunacy in three dozen words is not a bad performance.

Of course, by one who holds that wages are fixed by the conspiracy of a to class yield profit, it is an easy transition to the argument that they can, by the conspiracy of another class, be fixed at such a level as to leave no profit at all (that they have ceased to become wages then need not trouble such free-and-easy economists). The first step toward this is for the workers to want more. “On first awakening,” we are told, “workman demands more bread in return for labour” (how much of the “palliators'” confusion arises from ignorance of the fact that the workman does not sell labour, but labour-power ?) “He will inevitably advance from that position into the struggle to acquire education, and refinement.” So it seems that the source of the workers’ troubles is that they haven’t wanted anything. How then, are we to read the next sentence : “The standard of comfort held by the workers is the result of prolonged conflict with the capitalist class.” If they have not wanted anything what have they been fighting for ? Are we to suppose that their share of the “prolonged conflict” has been resistence to a beneficent capitalist class intent on forcing upon them “luxuries” they have not wanted ?

A most fertile source of confusion is this spectre, “Standard of Comfort.” Behind it lurks the idea that it is all to do with the resistence of the workers, and they have only to wish for and strive for a higher “standard of comfort” in order to get it. This is far from the truth. In all their long struggle with the master class the workers have never for a moment forgotten their appalling poverty, have never for a moment been without a desperate and feverish longing for a higher standard of living. If desire could have endowed with “luxury” the working class would be redolent of comforts. As a matter of fact all their powers of resistence are necessary to enable them to realise for their labour-power its plain, naked value, without any reference to the adjustment of that mystery of mysteries, the “standard of comfort.” This resistence is common to all owners of commodities. They all sell as dear as they can, and according as the market is favourable to or against them, they now get a little more, anon a little less, than the value of their goods, but in the long run neither more or less than that value. Yet no one dreams of saying that if commodity-owners desired more for their goods they could get it. The same with the commodity labour-power. The owner’s resistence, his determination not to part with it for less than the most he can get for it, is the presupposed condition which enables its value to find expression. The “standard of comfort,” on the other hand, is one of the conditions of the determination of that value. The value must exist before it can find expression, therefore the conditions determining the magnitude of that value must come before conditions which enable the value to find expression in (in this instance) the wage. To say then, that “When no longer required to devote the same proportion of his wages to the purchase of absolute necessaries, the workman . . . can be trusted to follow the methods of the middle and upper classes, who spend more when they have more to spend,” is to take hold of the wrong end of the stick. The workers can never keep the suggested surplus because they have first satisfied “absolute” needs, but only because they have made “luxuries” equally with the so-called “absolute necessaries” a first charge upon their wages. And this they can only do when their environment has rendered those “luxuries” so necessary that they are prepared to go without food rather than abandon them, and then they have become “absolute necessaries” in the cost of producing labour-power, must therefore be embodied in its value, and eventually in wages.

All this is to say that the “standard of comfort” is merely the level of subsistence determined by the general conditions of production and the social and natural environment. “The gradual lowering of the cost of living,” therefore, must leave the standard of living unchanged. The gradual lowering of the cost of working-class living is a constant factor in capitalist society, and it is accompanied by a steady decrease in the proportion of the product of their toil which goes to the workers.

And if “the gradual lowering of the cost of living” does result in “the growth of new desires,” what are these but new miseries to be endured, new whips to scourge them into submission, new chains to bind them to their benches and desks ? The anxiety of the threatened is in proportion to the loss he is threatened with, and new wants can only add to the horrors of insecurity. Not all, not even the worst, perhaps, of the evil of the working-class position is contained in their actual poverty. Its most awful aspect is the utter insecurity, the growing precariousness of their hold upon the means of subsistence. To talk of “new desires . . . leading them to resist wage reduction” is to ascribe the workers’ present awful plight to the lack of desires. Heaven knows they have desires and needs enough, and are sufficiently conscious of them, to make such insulting mockery quite superfluous. The peculiar position of the working class decrees that necessity must precede means, hence the question of luxury can never arise for them.

A. E. Jacomb

To be Continued.

Where Labor is Robbed. (1909)

From the January 1909 issue of the Socialist Standard

Labor is robbed where labor is employed, and, directly, nowhere else. Labor is robbed in the pay envelope, and the hand that reaches the pay envelope to him and no other, directly, is in his pocket.

Labor cannot be robbed in the prices it is compelled to pay for the commodities which it consumes. For the good and sufficient reason that the cost of living determines wages. Wages always hover about the cost of subsistence. If provisions and clothing are dear, wages must go up to meet the increased cost of living, since the laborer must live before he can work. If the employer gets his profits, he must see to it somehow that his wage-slave is in working condition, just as the farmer must see to it that his horses must have hay and stabling if he is to have the benefit of their labor. The cost of hay is of no particular concern to the horses.

In an accommodated sense, labor can be “robbed” in the quality of the goods consumed, by means of fraud and adulteration but not in price.

A Battle Creek contributor to last week’s “Wage Slave,” for example, says that ”the hand of the rich man is externally in the poor man’s pocket for taxes or for the price of meat.” This is not correct. The hand of the rich man, i.e., the employer, is in the employee’s pocket in one manner only, and that is in withholding from him, in the pay envelope, four-fifths of the value he has created. They can’t make the wage-earner pay one penny of the taxes, Municipal, State, or National; and if meat sold at a dollar a pound, that wouldn’t affect him in the slightest degree, either, so long as other commodities advanced correspondingly. If the price of meat advances out of proportion to the cost of other food-stuffs containing the same dynamic energy, the result will be simply to change the form of his diet, but it can’t possibly affect his income or make it easier or harder for him to save anything.

The only workingmen in whose pockets the Beef Trust has its hands are its own employees, whom it robs, as other employers do, in their pay envelopes, and the farmer who is robbed in his pay envelope too, in an arbitrary depression of prices.

That the wage-earners do not pay the taxes is directly evident with the great majority of them who have nothing to tax. But it is none the less certainly true of those, also, who possess a small property and are rated as taxpayers. In their case, such taxes as are levied upon them enter into the cost of living, and, again, the necessary cost of living determines the wages.

Tax reform, “trust-bustin’,” cheapened transit—or if they made it free, it would be all the same—municipal lighting, lowering of rents—all these and similar measures are seen to be purely Middle-Class measures, designed either to make the big robbers divide up a little more evenly with the little robbers, or to enable the employing class to house and feed their wage-slaves more cheaply and, consequently, get them for less wages.

The one thing needful for the working-class, without which all efforts to better their condition are vanity and vexation of spirit, is the capture for collective ownership of the land and the machinery of production. When we have this, we have it all. Without we are nothing. All efforts or attempts to benefit the working-man by lowering the cost of his living will only play into the hands of the employing class.

From The Wage-Slave.

Answers to Correspondents. (1910)

From the December 1910 issue of the Socialist Standard

“Barber.”—(Wigan.) 1. In Adam Smith’s day 3 per cent. was the usual rate of profit for sound security. To-day L.C.C. stock, second only to Consols, are issued at 3 ½ per cent. In many cases as large rates as ever are made to-day. The Cold Storage Co. paid over 100 per cent., some of the electric power companies have made similar profits, while some of the catering firms pay dividends of 30 to 40 per cent year after year.

The amount of profit apart from the rate, has of course increased enormously with the increased productiveness of labour.

2. Surplus value is the portion of wealth remaining after paying wages, cost of raw material and of machinery used up in the given time. But this as a rule undergoes further deduction for rent for the land, interest, and rates and taxes. The portion of the surplus value that remains is the capitalist’s Profit. Profit, therefore, is only a part of surplus value.

3. What you pay for your tobacco and sugar is their market prices, and taxes are the smallest factor in fixing these prices. The workers only receive sufficient to keep them in working condition, hence have no margin wherewith to pay taxes. See ” S.S.” for October 1904 and June 1905 where the matter is fully dealt with.

4. If you will send particulars of numbers joining we shall be pleased to help you.

5. Yes, old age pensions etc, do come out of surplus value, as shown by answer to question 3.

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E.C.R. asks “How do the S.P.G.B. propose to overthrow the present system of society and establish Socialism on Democratic lines and legislative means without Man and Woman Suffrage?”

The Socialist Party is not opposed to Adult Suffrage, but maintain that the working class have quite sufficient votes at their disposal to effect the revolutionary purpose when the class are sufficiently class conscious to make the time opportune. It is a question of education, not of extensions of the franchise ; and since the line of social cleavage is drawn through classes and not through sexes, there is nothing undemocratic in proposing to proceed even with our present limited male suffrage.

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E. Garvey asks how non-producing workers (instancing insurance collectors) can be exploited.

If 5 hours social labour produces a day’s energy, and the worker is compelled to render ten hours labour for the day’s necessaries which have taken only 5 hours to produce, then, no matter what the result of his labour (and the capitalist will see that it has some tangible result), he is exploited. Apart from this, however, even the so-called non-producing workers are necessary to the operations of the capitalist class, and Friend Garvey must not forget that the workers are exploited as a class since as a class they are deprived of the means of living except through wage slavery.

Replies to other correspondents held over.

Letter: The Rate of Profit (1977)

Letter to the Editors from the December 1977 issue of the Socialist Standard

The Rate of Profit

Did Marx hold that the rate of exploitation of workers increased inevitably? This appears to contradict his theory of the falling rate of profit, though I am aware he adduced counteracting tendencies that could increase the rate of profit?

Robin Cox

Haslemere

Reply:

The outstanding feature of what Marx wrote on this subject is his insistence that he was dealing only with tendencies, some working in one direction and some in the opposite direction. So at the beginning of Chapter XIV in Capital Vol 3 he wrote: “For this reason we have referred to the fall of the average rate of profit as a tendency to fall.”

The chief factor leading to a fall in the rate of profit arises from the tendency of the composition of capital to change in the direction that of every £1,000,000 capital invested a larger part takes the form of constant capital and a smaller part variable capital (wages). He illustrated this (see Chapter XIII) by showing how, with the same rate of exploitation and the same amount of surplus-value, the rate of profit on a capital of low composition would be 50 per cent. and on a capital of higher composition 20 per cent.

In Chapter XIV he listed some counter-acting tendencies, the first of which was increasing the intensity of exploitation, i.e. extracting more surplus-value from the workers.

But the capitalist cannot increase the intensity of exploitation simply because he wants to. He has to take account of the degree of resistance the workers can put up. Marx dealt with this in Chapter XIV of Value, Price and Profit. He showed that the actual rate of profit “is only settled by the continuous struggle between capitalist and labourer, the capitalist constantly tending to reduce wages to their physical minimum and to extend the working day to its physical maximum, while the working man constantly presses in the opposite direction. The matter resolves itself into a question of the respective powers of the combatants.”

That this is not just an academic question is shown by Engels in his 1892 Preface to The Condition of the Working Class in 1844, where he points out that in the fifty years since 1848 the factory workers “are undoubtedly better off” and that the condition of the workers organized in trade unions “has remarkably improved since 1848".

On the other hand a glance at Chapter XIV of Capital Vol. 3 will show that some of the factors listed by Marx as tending to raise the rate of profit are still operating.

It should also be borne in mind that in dealing with the rate of profit Marx was concerned with the workers in the productive sphere where alone value is created. This should not be confused with the different question of the proportion of annual national income received by the whole working class. In Chapter II of Value, Price and Profit Marx accepted the possibility that at that time 86 per cent. of the population received only 33 per cent, of the national income. Even if that figure exaggerated the actual degree of inequality, it is undoubtedly true that 86 per cent. of the population in this country now receive a larger proportion of national income than when Marx wrote.

Editors.

Why the Unemployed are Necessary under Capitalism. (1908)

From the December 1908 issue of the Socialist Standard

Beyond doubt the problem of unemployment is beginning to assume a new aspect. Hitherto a regrettable, but quite incidental, visitation of Providence, a working-class concern (as bad trade has been to do with the master class), a temporary inconvenience, our rulers have said, not entirely beyond the ameliorative touch of Private Charity, the problem is now developing a new visage.

The Incubus of the Out-o’-Work.

There is an ugly gleam in its eye, an all-devouring menace in its bestial mouth. No longer can the capitalists pretend that Private Charity is able to deal with the situation—it has been like a bee lending its honey sac to the support of a hungry elephant. It is so short a while since the dread shape was rampant over the land, and now it rises again, with added stature, with renewed rage and redoubled vigour. But the disquieting thing is that during the interim the shape has never for a moment been banished. Our lords and gentlemen and honorable boards, our masters and pastors and those set in authority over us, our organisers of production and captains of industry, all took it for a ghost, and tried to “lay” the ghost each in his own way. And alike for those who took it to the Lord in prayer, and those who passed measures in the legislature, and those who offered propitiation out of the lean purse of Private Charity, and those who accepted the Miltonian dictum that “they also serve who only stand and wait,” the shape unobligingly refused to be “laid.” The thing has not righted itself, even temporarily.

A strengthening suspicion is spreading over the minds of the master class that when the thing does right itself, it will do so in a way distinctly unpleasant to them. It dawns upon them that this thing which, they with complaisance regarded as a cross the workers had to bear, threatens more and worse against the rulers than the ruled. The idea takes shape that this nightmare is the product of their own operations, the inevitable and ominous companion of capitalist production, and they go in mortal fear that, sooner or later, it must overwhelm them.

The Policy of Sop Throwing.

Hence there are signs that every cheap expedient is to be used in the endeavour to stave off the flood of destruction which threatens to burst from this heaped up and increasing mass of humanity so completely cut off from the means of life. And are these efforts to succeed ? Let us enquire into the nature of the problem.

It is not the mere fact that so many men are idle that constitutes the serious feature of the problem. It may be no unmixed blessing to have this army of workless workers kicking their heels together, especially when the devil begins to apply his solution by finding work for their idle hands to do, but it is nowhere suggested that any other consideration can compare with the fact that the unemployed lack the necessaries of life—they starve in their great numbers, and those greater numbers dependent upon them starve in company. The real problem is, therefore, not to provide work for the unemployed, but to furnish them with the means of subsistence. It is a misnomer to call it an unemployed problem it is a starvation problem.

The solution of the starvation problem has been left to Private Charity: she has failed. They say the goddess has a slender purse, and we know that is true. Let us then suppose Private Charity’s purse as broad and deep and illimitable as her heart is said to be, that out of her bottomless resources and melting pity she could and did give to repletion to all directly or indirectly suffering from the effects of unemployment, what then would happen ?

The Awful Indolence of Man.

Alas for her peace of mind, our masters never tire of telling us what would happen. “Human nature,” they say, “would assert itself. It is not human nature to engage in uncongenial toil save under pressure. Remove the pressure of want from the unemployed and at once you have an army of ‘won’t works.'” Private Charity consents to the judgment, as must you and I.

There is no doubt about it, man does not sell his labour-power, and with it necessarily his liberty, for fun. To be unemployed is no terrible hardship in the absence of the poverty which accompanies working-class unemployment. Relieve us of the coercive force of the empty stomach, the shameless importunity of the landlord, and so on, and, frankly, we would not worry about work—our human nature is not so different from that of our betters that we need blush to confess that. And then what would happen ?

What would happen, my friends, in this impossible case, is just this. Those in employment,, finding themselves relieved of the competition of the workless (we will leave out of consideration the fact that their “human nature” would impel them to become workless, too, upon such terms), would begin to cast about them for some means of improving their condition. As it is true, as our masters tell us, that the workers would not sell themselves to toil unless they were forced to, it follows that they would oppose a more effective resistance to the weakened coercion. They would demand a higher price for their labour-power, either through increased wages or a shorter working day, or both.

Nothing Left for the Boss – What O !

We are taking here the extreme case, in which the labour market is entirely and effectually relieved of the pressure of the unemployed—whether by provision of work or of direct sustenance does not matter one iota. Theoretically, the worker, being without a competitor, would have things all his own way. Wages, being a price, must rise by leaps and bounds, as all prices do in the absence of competitors. And as, mind you, wages are that portion of the total value created which is enjoyed by those who create it, it follows that a rise in wages results (other things remaining constant) in a decrease of the portion of value left to those who do not create it.

Now mark the effect. Capitalist demand for labour-power is excited only by the desire for that portion of the value created which remains after that labour-power is paid for, and will therefore be in proportion to the relative amount of that surplus-value. Just as the removal of the unemployed from the labour market has torn from the employing class the power of resisting the demands of the working class, so now the diminished profits react against the worker by lessening the demand for labour-power which the desire for profit alone creates. Those concerns which have been run at the lowest profit, immediately cease to show any at all, and are shut down, and Private Charity has other hordes to comfort at her eleemosynary bosom. Solomon gurgled of “breasts like towers,” but she needs breasts like oceans for the job she has taken on, must wear thin and thinner with the calls upon her system, and after all her sacrifice will prove unavailing, for wages, rising to the point of extinguishing all profit, has extinguished with it the capitalists’ desire to engage their factories

and machinery in the process of wealth production.

No Profit, No Production.

Here is a deadlock. The solution of the unemployed problem by sustaining the workless has resulted in the raising of wages, the absorption of profit, and, as a necessary corollary, the cessation of production. From which it appears that idleness has its dignity, no less than labour, since the unemployed are necessary to capitalist production, and that it is true indeed that “they also serve who only stand and wait.”

But capitalist sophism tells us that other things do not remain constant—which, of course, is true enough. We are told that a rise in wages is followed by a rise in prices, but this is presuming too much upon our ignorance. The workers create all value, whether it take the shape of golden sovereigns, loaves of bread, stained glass angels, or what not. If then the price of loaves went up alone the sovereign would buy fewer than before; but if the price of gold rose proportionately, the relative positions of the two remain the same. Just all prices are to go up, since all commodities are the result of wage labour and all wages are to rise. The result is that none of their relative positions have changed. The sovereign still buys as many loaves before, as many Manifestoes or SOCIALIST STANDARDS. There has then been no rise in prices, though, since our ingenuous masters always except one commodity (labour-power) from the added price-stature, they manage to indicate a fall in wages—which is all they want to do. But, with no unemployed “standing and waiting,” the working class would hold the whip hand. And all this is apart from the fact that prices of commodities do not bear relation to the cost of the labour-power consumed in their production, but to the amount of necessary labour embodied in them.

Machinery creates its own Unemployed.

Again other things do not remain constant. We have been considering an extreme case, where production has ceased because profit has ceased, and all because there were no unemployed to keep down wages. It is clear then, that if production is to continue, is must either do so under conditions in which its operation is not dependent upon profits, or the unemployed must be again brought into being to force down wages and allow profit to reappear.

The system makes beautiful provision for this by the law of the development of machinery. In practically every trade there exists machinery and methods in partial use far in advance of that generally employed—indeed, all through the industrial world there are degrees of perfection or imperfection in the means of production, tailing away into antiquity so distant as can just be run at sufficient profit to save them from extinction. In each degree of development there is a fringe where it is a question if better machinery could not be more profitably adopted. Any raising of wages at once decides the question. At all times machinery is the competitor of labour-power. To increase the price of the latter is merely to hasten its displacement by the former. In the printing world the Linotype composing machine is an accomplished fact. It is not that the machine would have to be invented—it is there, doing the work of several men under the hands of one. The only question is the diameter of the circle of its profitable application, and this, of course, is a matter of competition with the hand compositor.

An Automatic Adjustment (not patented).

If the wages of the latter go up, there is a corresponding advantage on the side of the machine, an enlargement in the circle of its employment, and an addition to the unemployed army to beat down wages again. It may be said that the machine operator’s wages rise also, but that is only one man’s wages against several displaced by the machine. It may also be objected that the cost of the machine is raised since higher wages must be paid for its construction, but that lands us again in the impossible position of witnessing an all-round rise in prices, and runs counter to the economic verity that prices (averaged by rises and falls cancelling one another) express, not the amount of wages consumed in producing the commodities, but the necessary labour embodied in them.

The fact is that every advance in wages reacts upon machinery and methods, pronouncing the doom of those requiring most labour-power to operate them, throwing men out of work, and so creating that army of unemployed which is necessary to the continuance of production so long as production is carried on for profit.

The position may be summed up as follows. As under present conditions all commodities are produced for profit, production must cease with the cessation of profit. As profit and wages between them constitute, and have their only source in, the value created by the worker, profit can only appear while wages are prevented from consuming the whole product of labour. As wages, the price of labour-power, are regulated by the relation of supply and demand, a surplus of labour-power (the unemployed) is necessary to prevent wages swallowing up all profit.

The Logic of the Revolutionary Proposal.

Therefore the unemployed army is a vital necessity to capitalist production, and there can be no solution under capitalism.

As wages are regulated by the relation of supply to demand of that labour-power which it is the price of, any diminution of the surplus (unemployed) labour-power is attended by a rise in wages. As machinery is the competitor of labour-power, any rise in the price of labour-power induces its displacement by machinery, which thus creates in perpetuity the out-of-work army. Therefore there can be no partial solution to the unemployed problem under capitalism.

As profit is the only incentive to capitalist production, and an unemployed army is an inevitable necessity to the production of profit, it is clear that the solution of the unemployed problem must be sought in a new productive objective—production must be independent of profit.

As the consumer demands the production of commodities because they are use-values, and demands them as long as they have use-value, it is clear that utility would be a more constant incentive to produce than profit, since things have always utility while people need them, and it is just when people need them most, because they are starving, but have no money to pay for them because they are unemployed, that there is no profit in their production.

As production for profit implies the power to wrest from the workers part of their product by keeping some of them (the unemployed) from production, it presupposes also private ownership by the few of the machinery of production.

And as production for use means production while any one has need, it implies free access to the means of production—in other words, common ownership of the means and instruments for producing and distributing wealth, by and in the interest of the whole community.

The establishment of this changed property condition is the revolutionary proposition, the object of all Socialists. It is revolutionary because it changes the whole structure of society from top to bottom. In particular it abolishes the unemployed by giving free access to the means of production.

Socialism is the only cure for unemployment, therefore study Socialism.

A. E. Jacomb