Capital, chapters six and seven

By 1867 Karl Marx was fairly well-known in the European and US workers’ movements, through his activity in the First International, founded in September 1864. His Communist Manifesto of 1848 had been republished and translated. He was impelled to finalise at least part of his long economic studies.

We now have as Capital (volume 1) just one volume out of six eventually published from Marx's drafts. Those drafts in turn covered only parts of Marx's study-scheme. Nevertheless, Marx shaped it as a book which could stand on its own, probably knowing even in 1867 he would never complete his scheme.

It is an essential reference point. It is, as Marx himself commented, mostly not hard to read. But it is a large book. In this run-through of reference points we cover chapters 6 and 7, where Marx lays out his theory of capitalist exploitation. In future run-throughs we will cover others.

Capital appeared first in a German edition. For the first few months, Marx and Engels exchanged exasperated comments about how slow responses to it. A French translation, which Marx supervised closely, came in 1872; the English translation, only in 1887, so early English Marxists like William Morris and Harry Quelch had to learn French and study the French edition, Quelch after leaving school at age ten.

With the growth and spread of working-class socialist parties in all the developed capitalist countries after the foundation of the Second International in 1889, the book was translated and read more and more widely. As early as 1886, Engels called it “the Bible of the working class”. All across the world, workers (many with only a few years of formal education) and students gathered in groups to study and discuss the book, chapter by chapter, sentence by sentence.

Even in the bourgeois academic and literary world, Capital has won Marx a place as a reference figure, respected if not applauded, in historical studies, sociology, politics, and philosophy.

Profit appears in pre-capitalist societies, via large market anomalies and via cheating and usury. In a capitalist society, where commodity-exchange is universal, uniform, and fluid, those continue. But they cannot explain the systematic, “sober”, regular self-expansion of capital which is the heartbeat of this society.

To explain that, Marx goes into “the hidden abode of production”.

How can the self-expansion of value originate in production? And if it originates in production, how can it then appear in circulation, in the market-place? The explanation must lie in some process which slides across the boundary between market-place and production, between the world of commodities and the world of labour.

To find the answer, Marx looks at the ways in which labour evolves in capitalist society. He had commented in his unpublished “Introduction” of 1857 that: “Labour seems a quite simple category. The conception of labour in this general form – as labour as such – is also immeasurably old. Nevertheless, when it is economically conceived in this simplicity, ‘labour’ is as modern a category as are the relations which create this simple abstraction… In the most modern form of existence of bourgeois society – in the United States… for the first time, the point of departure of modern economics, namely the abstraction of the category ‘labour’, ‘labour as such’, labour pure and simple, becomes true in practice…”

Social labour is both concrete labour – a particular useful activity – and abstract labour, a using-up of a quota of social labour-power. Labour-power and labour are not the same thing. Workers do not sell labour to capitalists. We sell labour-power. We cannot labour until we sell our labour-power. Once we have sold our labour-power, its use (our labour) is not ours to sell, but is controlled, and its product owned, by the capitalists.

That labour-power takes the form of a commodity to sell “has no basis in natural history, nor does it have a social basis common to all periods of human history. It is the result of a past historical development, the product of many economic revolutions…”

Capitalist society is both the becoming-universal of the commodity-form of the products of labour, and labour-power becoming a commodity. Wage-labour defines capitalist society.

Labour-power is a commodity, subject to the same laws of the world of commodities as other commodities. It has a value, defined by the social labour-time crystallised in it, i.e. the social labour-time necessary to produce the commodities which embody a “living wage”. That “living wage” has a “moral and historical element”, unlike the values of other commodities. Nevertheless, in a particular society and era, it is defined.

At the same time, the using-up of labour-power – the “consumption” by the capitalist of the commodity, labour-power, which he has purchased – is nothing other than the creation of new value.

These two amounts, the value of labour-power, as reflected in the market rates at which it is bought and sold, and the new value created by the using-up of labour-power, as reflected in the capitalists' revenues from sales, are distinct, and therefore potentially different. Here there is a potential for an inequality from the world of production to slide over into a lopsided exchange (M — M+∆M) in the world of commodities.

At the end of chapter 6, Marx sums up the “sphere” which the analysis is leaving, the capitalist market-place, as the domain of “Freedom, Equality, Property, and Bentham”.

This summary is ironic. It is not just ironic. Capitalist society does put freedom and equality on the map, if in many ways at a distance, compared to previous societies.

Chapter 7 opens Marx’s analysis of the labour process, and expounds “the secret of profit-making”.

Profits are not “wages of management”.

They are not a reward for the “abstinence” which the capitalists show by investing in factories and equipment rather than blowing all their wealth on big dinners. In the first place, how could the whole capitalist class, collectively, sell off their factories and spend all the proceeds on big dinners? Whom would they sell them to? In the second place, virtue may be rewarded by an easy conscience, but what economic law says virtue will be rewarded by profit?

Profits arise because the new value pocketed through the capitalists’ “consumption” of the labour power they buy – i.e., the average socially-necessary labour-time equivalent of the hours which the capitalists make us labour – is a different quantity from the value paid out by the capitalists to buy the labour power (this difference is established in chapter 6); and because then the capitalists make us work longer than the labour-time necessary to cover our wages, 12 hours rather than six in the example which Marx gives.

Or, at least, as a first approximation profits arise that way. The later chapters of Capital refine the answer beyond that first approximation.

In these chapters of Capital, Marx tried to simplify his exposition, and so it can read as if Marx is saying that exploitation arises simply from the working-time necessary to produce our subsistence being shorter than a full active day. If that were so, then all societies beyond the least productive (where gruelling labour can produce no more than bare physical subsistence for us or our households) would see exploitation.

But the gist of Marx's argument, I think, is that exploitation is not a static comparison (more is produced than workers consume), but an ongoing class struggle. It is continual struggle by capitalists to increase the quantity produced (by recruiting more workers, lengthening the working day, "filling in gaps" within that day, making us work faster, improving technology) while restraining the growth of workers' subsistence or even reducing its quantity as measured by hours of social labour required to produce the equivalent of "a living wage".

Labour, and hours of labour, are not eternal given facts. Most of Capital is about how they are incrementally transformed in the capitalists' continual struggle and our fight back. The transformation makes the working class into something more an aggregate of individuals each subject to a law under which payment for their labour-power is less than the revenue their employer gets from "consuming" the labour-power which the employer has produced.

It makes us into a collective, shaped by working together in cooperation, pushed to develop more diverse skills and capabilities, and constantly pulled, to one degree or another, into battles over the length of the working day, over protecting our health and safety from the employer's drives, over whether wages actually cover the value of labour-power ("a living wage"), over the "moral and historical" determination of that value, and over control of the labour process.

Workers' Liberty study notes at bit.ly/25-cap. Marx's text at bit.ly/c-ch6 and bit.ly/c-ch7. Otto Rühle's abridged version at workersliberty.org/capital-abridgement. Audio version at bit.ly/ptref-audio.