Das Kapital, Volume I

''''', published on September 14, 1867, is the first of three volumes in Karl Marx's monumental work, Das Kapital, and the only volume to be published during his lifetime. Marx's aim in Capital, Volume I is to uncover and explain the laws specific to the capitalist mode of production and of the class struggles rooted in these capitalist social relations of production.

Part One: Commodities and Money

Chapters 1-3 begin with a dense theoretical discussion of the commodity, value, exchange, and the genesis of money. As Marx writes, "Beginnings are always difficult in all sciences ... the section that contains the analysis of commodities, will therefore present the greatest difficulty." The modern reader is often perplexed about Marx going on about "one coat is equal to ten yards of linen..". Professor John Kenneth Galbraith reminds us that "the purchase of a coat by an average citizen was an action comparable in modern times to the purchase of an automobile or even a house."

Chapter 1: The Commodity

Section 1. The Two Factors of the Commodity: Use-Value and Value (Substance of Value, Magnitude of Value)'

Marx begins his analysis with what he calls the “commodity.” Marx explains that the commodity is something independent of ourselves that meets a human want or need of any kind. It is clear that Marx is not concerned with why people buy commodities, only that people buying commodities is inevitable. Marx explains that the commodity has something called a “use-value.” The use-value is determined by how useful the commodity is. The actual use-value, however, is intangible. He explains that use-value can only be determined “in use or consumption”. After determining the use-value of the commodity, something called an “exchange-value” is then derived from it when the commodity is exchanged. He explains this as the quantity of other commodities that it will exchange for. He gives the example of corn and iron. No matter their relationship, there will always be an equation where a certain amount of corn will exchange for a certain amount of iron. He sets up this example to say that all commodities are in essence parallel in that they can always be exchanged for certain quantities of other commodities. He also explains that one cannot determine the exchange-value of the commodity simply by looking at it or examining it. The exchange-value is not material. In order to determine the exchange-value, one must see the commodity being exchanged with other commodities. Marx explains that these two aspects of commodities are at the same time separate but also connected in that one cannot be discussed without the other. Marx explains that while the use-value of something can only change in quality, the exchange-value can only change in quantity.

Marx then goes on to explain that the exchange-value of a commodity is merely a portrayal its value. Value is what connects all commodities so that they can all be exchanged with each other. The value of a commodity is determined by its socially necessary labor time, defined as “the labour time required to produce any use-value under the conditions of production, normal for a given society and with the average degree of skill and intensity of labor prevalent in that society.” Therefore, Marx explains, the value of a commodity does not stay constant as it advances or it varies in labor productivity, which may occur for many reasons. However, value does not mean anything unless it conjoins back to use value. If a commodity is produced and no one wants it or it has no use, then “the labour does not count as labour,” and therefore it has no value. He also says that one can produce use-value without being a commodity. If one produces a commodity solely for his own benefit or need, he has produced use-value but no commodity. Value can only be derived when the commodity has use-value for others. Marx calls this social use-value. He writes all of this to explain that all aspects of the commodity (use-value, exchange-value, and value) are all separate from each other, but are also essentially connected to each other.

Section 2. The Dual Character of the Labour Embodied in Commodities

Marx discusses the relationship between labor and value. Marx states if there is a change in the quantity of labor expended to produce an article, the value of the article will change. This is a direct correlation. Marx gives as an example the value of linen versus cloth to explain the worth of each commodity in a capitalist society. Linen is hypothetically twice as valuable as thread because more socially necessary labor time was used to create it. Use-value of every commodity is produced by useful labor. Use-value measures the actual usefulness of a commodity, whereas value is a measurement of exchange value. Objectively speaking, linen and thread have some value. Different forms of labor create different kinds of use-values. The value of the different use-values created by different types of labor can be compared because both are expenditures of human labor. One coat and ten yards of linen take the same amount of socially necessary labor time to make, so they have the same value.

Section 3. The Value-Form or Exchange-Value

(a) The Simple, Isolated, or Accidental Form of Value

In this chapter Marx explains that commodities come in double form: natural form and value form. We don't know commodities' value until we know how much human labor was put in it. Commodities are traded for one another after their values are decided socially. Then there is value-relation, which lets us trade between different kind of commodities. Marx explains value without using money. Marx uses 20 yards of linen and a coat to show the value of each other (20 yards of linen = 1 coat, or 20 yards of linen are worth 1 coat). Marx calls this an equivalent form. He adds that comparing 20 yards of linen to itself (20 yards of linen = 20 yards of linen, or 20 yards of linen are worth 20 yards of linen) is meaningless, because there is no expression of value. Linen is an object of utility whose value cannot be determined until it is compared to another commodity. Determining the value of a commodity depends on its position in the expression value.

(b) The Total or Expanded Form of Value

Marx begins this section with an equation for the expanded form of value: "z commodity A = u commodity B or = v commodity C or = w commodity D or = x commodity E or = etc." where the lower case letters (z, u,v, w, and x) represent quantities of a commodity and upper case letters (A, B,C,D, and E) represent specific commodities so that an example of this could be: "20 yards of linen = 1 coat or = 10 lb. tea or = 40 lb. coffee or = 1 quarter of corn or = 2 ounces of gold or = ½ ton of iron or = etc." Marx explains that with this example of the expanded form of value the linen “is now expressed in terms of innumerable other members of the world of commodities. Every other commodity now becomes a mirror of linen’s value.” At this point, the particular use-value of linen becomes unimportant, but rather it is the magnitude of value (determined by socially necessary labor time) possessed in a quantity of linen which determines its exchange with other commodities. This chain of particular kinds (different commodities) of values is endless: it contains every commodity and changes constantly as new commodities come into being.

(c) The General Form of Value

Marx begins this section with the table:

${\begin{bmatrix}1&{\mbox{coat}}\\10&{\mbox{lb. of tea}}\\40&{\mbox{lb. of coffee}}\\1&{\mbox{quarter of corn}}\\2&{\mbox{ounces of gold}}\\1/2&{\mbox{ton of iron}}\\x&{\mbox{commodity A, etc.}}\\\end{bmatrix}}=20{\mbox{ yards of linen}}$

Then he divides this sub-set of section 3 into three parts:

(1) The changed character of the form of value. After highlighting the previous two sub-sets Marx explains that because these commodities have a unified exchange-value, the only thing that differentiates them now is their individual use-value. “The general form of value, on the other hand, can only arise as the joint contribution of the whole of commodities.” (159) Making these values socially influenced and requiring qualitative equivalency as use-values.

(2) The development of the relative and equivalent forms of value: their interdependence. Here Marx writes about the interrelatedness of the relative form and the equivalent form. He first explains that there is a correlation between them even though they are polar opposites. He states that we must also realize that the equivalent form is a representation and an offshoot of the relative form.

“This equivalent has no relative form of value in common with other commodities; its value is rather, expressed relatively in the infinite series of all other physical commodities.” (161)

Things cannot be either completely relative or completely equivalent. There must be a combination to express the magnitude and universal equivalency. That form is the expanded relative form of value, which is a "specific relative form of value of the equivalent commodity.” (161)

(3) The transition from the general form of value to the money form. This is the transitional idea between taking the general form (the universal equivalent form for all general commodities) and turning it into the money form. Here Marx describes how there can be a commodity so universal to all commodities that it actually excludes itself to the point of no longer being an equivalent commodity but rather a representation of a commodity. Social acceptance of its commodity exchange value is so universal that it can transition into a form of money, for example, gold.

(d) The Money Form

${\begin{bmatrix}1&{\mbox{coat}}\\10&{\mbox{lb. of tea}}\\40&{\mbox{lb. of coffee}}\\1&{\mbox{quarter of corn}}\\20&{\mbox{yards of linen}}\\1/2&{\mbox{ton of iron}}\\x&{\mbox{commodity A, etc.}}\\\end{bmatrix}}=2{\mbox{ ounces of gold}}$

Here Marx illustrates the shift to “money form." Universal equivalent form or universal exchangeability has caused gold to take the place of linen in the socially accepted customs of exchange. Once it had reached a set value in the world of commodities gold became the money commodity. Money form is distinct from Sections A, B, and C.

Now that gold has a relative value against a commodity (such as linen), it can attain price form:

“The ‘price form’ of linen is therefore: 20 yards of linen = 2 ounces of gold, or, if 2 ounces of gold when coined are £2, 20 yards of linen = £2.” (163)

This illustrates the application of price form as a universal equivalent. The simplified application of this idea is then illustrated as:

x of commodity A = y of commodity B

Section 4. The Fetishism of the Commodity and Its Secret

Marx's inquiry in this section focuses on the nature of the commodity, apart from its basic use-value. In other words, why does the commodity in its value-form (exchange) appear to be something other than the aggregation of homogenous human labor? Marx contends that due to the historical circumstances of capitalist society, the values of commodities are usually studied by political economists in their most advanced form: money. These economists see the value of the commodity as something metaphysically autonomous from the social labor that is the actual determinant of value. Marx calls this fetishism - the process whereby the society that originally generated an idea eventually, through the distance of time, forgets that the idea is actually a social and therefore all-too-human product. This society will no longer look beneath the veneer of the idea (in this case the value of commodities) as it currently exists. The society will simply take the idea as a natural and/or God-given inevitability that they are powerless to alter.

Marx compares this fetishism to the manufacturing of religious belief: people initially create a deity to fulfill whatever desire or need they have in present circumstances, but then these products of the human brain appear as autonomous figures endowed with a life of their own and enter into a relations both with each other and with the human race.(165) Similarly, commodities only enter into relation with each other through exchange, which is a purely social phenomenon. Before that, they are simply useful items, but not commodities. Value itself cannot come from use-value because there is no way to compare or contrast the usefulness of an item; there are simply too many potential functions.

Once in exchange, commodities' values are determined by the amount of socially useful labor-time put into them because labor can be generalized. For example, it takes longer to mine diamonds than it does to dig quartz, so diamonds are worth more. Fetishism within capitalism occurs once labor has been socially divided and centrally coordinated, and the worker no longer owns the means of production. They no longer have access to the knowledge of how much labor went into a product because they no longer control its distribution. The only obvious determinant of value remaining to the mass of people is the value that was assigned in the past. Thus, the value of a commodity seems to arise from a mystical property inherent to it, rather than from labor-time, the actual determinant of value.

Chapter 3: Money, or the Circulation of Commodities

Section 1. The Measure of Values

(a) Functions of Metallic Money

In chapter 3, section I Marx examines the functions of money commodities. According to Marx the main function of money is to provide commodities with the medium for the expression of their values, i.e. labor time. The function of money as a measure of value serves only in an imaginary or ideal capacity. That is, the money that performs the functions of a measure of value is only imaginary because it is society that has given the money its value. The value of one ton of iron for example, is expressed by an imaginary quantity of the money commodity, which contains the same amount of labor as the iron.

(b) Multiple Forms of Metallic Money

As a measure of value and a standard of price, Money performs two functions. First, it is the measure of value as the social incarnation of human labor. Second it serves as a standard of price as a quantity of metal with a fixed weight. As in any case where quantities of the same denomination are to be measured the stability of the measurement is of the utmost importance. Hence the less the unit of measurement is subject to variations the better it fulfills its role. Metallic currency can only serve as a measure of value because it is itself a product of human labor.

Commodities with definite prices appear in this form: a commodity A= x gold; b commodity B= y gold; c commodity C= z gold, etc where a, b,c represent definite quantities of the commodities A, B,C and x, y,z definite quantities of gold. In spite of the varieties of commodities their values become magnitudes of the same denomination: gold-magnitudes. Since these commodities are all magnitudes of gold they are comparable and interchangeable.

(c) Price

Price is the money-name of the labor objectified in a commodity. Like the relative form of value in general, price expresses the value of a commodity by asserting that a given quantity of the equivalent is directly interchangeable. The price form implies both the exchangeability of commodities for money and the necessity of exchange. Gold serves as an ideal measure of value only because it has already established itself as the money commodity in the process of exchange.

Section 2. The Means of Circulation

(a) The Metamorphosis of Commodities

In this section Marx further examines the paradoxical nature of the exchange of commodities. The contradictions that exist within the process of exchange provide the structure for “social metabolism.” The process of social metabolism “transfers commodities from hands in which they are non-use-values to hands in which they are use-values…” (198) Commodities can only exist as “values” for a seller and “use-values” for a buyer. In order for a commodity to be both a “value” and a “use-value” it must be produced for exchange. The process of exchange alienates the ordinary commodity when its antithesis, the “money commodity” becomes involved. During exchange, the money commodity confronts the ordinary commodity disguising the true form of the ordinary commodity. Commodities and money are at opposites spectrums, and exist as separate entities. In the process of exchange, gold or money functions as “exchange-value” while commodities function as “use-values.” A commodity’s existence is only validated through the form of money and money is only validated through the form of a commodity. This dualistic phenomenon involving money and commodities is directly related to Marx’s concept of “use-value” and “value.”

Commodity-Money-Commodity
          $C->M->C$

Marx examines the two metamorphoses of the commodity through sale and purchase. In this process, “as far as concerns its material content, the movement is C-C, the exchange of one commodity for another, the metabolic interaction of social labor, in whose result the process itself becomes extinguished.” (200)

$C->M$

First metamorphosis of the commodity, or sale. In the process of sale, the value of a commodity, which is measured by socially necessary labor-time, is then measured by the universal equivalent, gold.

$M->C$

The second or concluding metamorphosis of the commodity: purchase. Through the process of purchase all commodities lose their form by the universal alienator, money. “Since every commodity disappears when it becomes money it is impossible to tell from the money itself how it got into the hands of its possessor, or what article has been changed into it” (205).

$M->C$ = $C->M$

A purchase represents a sale although they are two separate transformations. This process allows for the movement of commodities and the circulation of money.

(b) The Circulation of Money

The circulation of money is first initiated by the transformation of a commodity into money. The commodity is taken from its natural state and transformed into its monetary state. When this happens the commodity “falls out of circulation into consumption.” The previous commodity now in its monetary form replaces a new and different commodity continuing the circulation of money. In this process, money is the means for the movement and circulation of commodities. Money assumes the measure of value of a commodity, i.e. the socially necessary labor-time. The repetition of this process constantly removes commodities from their starting places, taking them out of the sphere of circulation. Money circulates in the sphere and fluctuates with the sum of all the commodities that co-exist within the sphere. The price of commodities varies by three factors: "the movement of prices, the quantity of commodities in circulation, and the velocity of circulation of money.” (218)

(c) Coin: The Symbol of Value

Money takes the shape of a coin because of how it behaves in the sphere of circulation. Gold became the universal equivalent by the measurement of its weight in relation to commodities. This process was a job that belonged to the state. The problem with gold was that it wore down as it circulated from hand to hand, so the state introduced a new circulating medium: paper money as a representation of gold. This form of imaginary expression continues to mystify and intrigue. Marx views money as a “symbolic existence” which haunts the sphere of circulation and arbitrarily measures the product of labor.

Section 3. Money

(a) Hoarding

The exchange of money is a continuous flow of sales and purchase. Marx writes, “In order to be able to buy without selling, [one] must have previously sold without buying.” This simple illustration demonstrates the essence of hoarding. In order to potentially buy without selling a commodity in your possession, you must have hoarded some degree of money in the past. Money becomes greatly desired due to potential purchasing power. If one has money, one can exchange it for commodities, and vice versa. However, while satisfying this newly arisen fetish for gold, the hoard causes the hoarder to make personal sacrifices.

(b) Means of Payment

In this section Marx analyzes the relationship between debtor and creditor and exemplifies the idea of the transfer of debt. In relation to this, Marx discusses how the money-form has become a means of incremental payment for a service or purchase. He states that the “function of money as means of payment begins to spread out beyond the sphere of circulation of commodities. It becomes the universal material of contracts.” Due to fixed payments and the like, debtors are forced to hoard money in preparation for these dates. “While hoarding, as a distinct mode of acquiring riches, vanishes with the progress of civil society, the formation of reserves of the means of payment grows with that progress.”

(c) World Money

Countries have reserves of gold and silver for two purposes: (1) Home Circulation; and (2) External Circulation in World Markets. Marx says that it is essential for countries to hoard, as money is needed “as the medium of the home circulation and home payments, and in part out of its function of money of the world.” Accounting for this hoarding in the context of hoarded money’s inability to contribute to the growth of a capitalist society, Marx states that banks are the relief to this problem:

Countries in which the bourgeois form of production is developed to a certain extent, limit the hoards concentrated in the strong rooms of the banks to the minimum required for the proper performance of their peculiar functions. Whenever these hoards are strikingly above their average level, it is, with some exceptions, an indication of stagnation in the circulation of commodities, of an interruption in the even flow of their metamorphoses.

Part Two: The Transformation of Money into Capital

In Part II of Capital Karl Marx explains the three components necessary to create capital through the process of circulation: the first section of Part II, Chapter 4, explains the general formula for capital; Chapter 5 delves further by explaining the contradictions of the general formula; and the last section of Part II, Chapter 6, describes the sale and purchase of labor power within the general formula. The three components delineate the process of turning money into capital.

Money, as described by Marx, can only be transformed into capital through the circulation of commodities. Money’s original form does not appear as capital, but instead only a means of exchange, and representation of exchange-value. Money becomes capital when someone puts money into circulation in hopes of getting the money back (ideally in a greater quantity). The circulation of commodities has two forms that make up the general formula: C-M-C and M-C-M. C-M-C represents the process of first selling a commodity for money (C-M) and then using that money to buy another commodity (M-C): “selling in order to buy.” (247) M-C-M represents the same components but in inverted form. M-C-M describes transacting money for a commodity (M-C) and then selling the commodity to regain money (C-M).

The largest distinction between the two forms appears through the result of each. During C-M-C, a commodity sold will be replaced by a commodity bought. In this form money only acts as a means of exchange, so essentially commodities, with the help of money, become exchanged for other commodities. The transaction ends there with the exchange of use-values (use-value) and the money has, according to Marx, “been spent once and for all.” (249) The C-M-C form facilitates the exchange of one use-value for another, or in other words the form functions only as a means of satisfying one’s needs. On the contrary, during M-C-M money essentially becomes exchanged for more money. The person who invested money into a commodity sells it for money. The money returns to the initial starting place, so the money is not spent, like C-M-C, but instead advanced. The only function of this process lies in its ability to valorize (valorization). By withdrawing more money from circulation than the amount thrown-in, money can be re-invested in circulation creating repeated accumulation of monetary wealth—a never ending process. Thus M-C-M’ becomes the objective of M-C-M. M’ stands for the money returned in the circulative process (M) plus the additional surplus value gained (M∆), or in its entirety M’=M+M∆. Capital can only be created once the process of M-C-M has been completed; once money returns to the initial starting point to be re-entered into circulation.

Karl Marx points out that, “in its pure form, the exchange of commodities is an exchange of equivalents, and thus it is not a method of increasing value,” (261) and so a contradiction reveals itself. If the participating individuals exchanged equal values neither of the individuals would gain monetary profit—the needs being satisfied would be the only gain. The creation of surplus-value then becomes rather peculiar for Marx, because commodities, in accordance with socially assigned necessary values, should not create surplus-value if traded fairly. Marx investigates the matter and comes to a conclusion, “surplus-value cannot arise from circulation, and therefore that, for it to be formed, something must take place in the background which is not visible in the circulation itself.” (268) Through the example of a piece of leather Marx then describes how humans can, through the means of fresh labor, increase the value of a commodity. By turning the leather into boots the value of the leather increased, because now more labor has been applied to the leather, and labor determines the exchange-value of a commodity. Without interacting with commodity-owners (workers), commodity producers (capitalists) cannot valorize value.

Marx then explains the contradiction of the general formula. Capital cannot be created from circulation because equal transactions of commodities create no surplus-value, and unequal transactions of commodities may change the distribution of wealth, but surplus-value still remains unchanged, so capital cannot be created from circulation, because of fixed value, but without circulation it cannot be possible either, because labor creates value within the general formula. Marx writes, “It must have its origin both in circulation and not in circulation.” (268) A “double result” (268) remains: commodities must be bought by the capitalist at their value, sold at their value, and at the same time conclude the process with more money than beginning with—the profiting seemingly taking place both inside and outside the general formula.

The intricacies of the general formula relate to the role of labor-power. In the last section of Part II, Marx investigates labor-power as a commodity. Labor-power existing on the market depends on two fulfillments: the workers must offer it for temporary sale on the market, as owners of their own work capacity; and, the worker must not have a means to their own subsistence. If the labor-power fails to be sold only temporarily then the worker becomes a slave, and worker dependence for a means of subsistence ensures a large working force, necessary for the production of capital.

The value of labor, to be bought on the market as a commodity, represents the definite amount of socially necessary labor objectified in the worker, or the, according to Marx, “the labor-time necessary for the production [of the worker],” (274) which means the food, education, shelter, health, etc. required to create and maintain a worker. This exchange value, along with the use-value of the actual work being sold, makes labor-power a commodity. This value however remains useless, like any other commodity, unless sold, so workers seek temporary employment in order to fulfill their means of subsistence, because they cannot do so on their own. Thus, the peculiar relationship between capitalists and workers forms: capitalists need workers to combine with their means of production to create a sellable commodity, and the workers need capitalists to provide a wage that in turn pays for a means of subsistence. The private interests of each class maintain the relationship, and perpetuate a capitalistic society.

Part Three: The Production of Absolute Surplus-Value

In Part Three of Capital Volume I Karl Marx explores the production of Absolute Surplus Value. To understand this phenomenon one must first understand the labor process itself. The production of absolute surplus value arises directly out of the labor process.

There are two sides to the labor process. On one side there is the buyer of labor power, or the capitalist. On the other side there is the worker. For the capitalist the worker possesses only one use-value, that of labor power, or the ability to do work. The capitalist buys from the worker his ability to do work, and in return the worker receives a wage, or a means of subsistence.

Marx says this of the labor process: “In the labor process, therefore, man’s activity, via the instruments of labor, effects an alteration in the object of labor…. The product of the process is a use-value, a piece of natural material adapted to human needs by means of change in its form. Labor has become bound up in its object: labor has been objectified, the object has been worked on” . The labor that the worker has put forth to produce the object has been transferred to the object, thus giving it value.

Under capitalism the labor process is very unique. The capitalist owns everything in the production process. The capitalist owns: the raw materials that the commodity is made of, the means of production, and the labor power (worker) itself. Also, at the end of the labor process the workers do not own what they have produced though their efforts. The capitalist owns the product of their labor as well. Since the capitalist owns everything in the production process he is free to sell it for his own profit. The capitalist wants to produce: “An article destined to be sold, a commodity; and secondly he wants to produce a commodity greater in value than the sum of the values of the commodities used to produce it, namely the means of production and the labor-power he purchased with his good money on the open market. His aim is to produce not only a use-value, but a commodity; not only use-value, but value; and not just value, but also surplus value”

The goal of the capitalist is to produce surplus value. However, producing surplus value proves to be difficult. If all goods are purchased at their full price then profit cannot be made. Surplus value cannot arise from buying the inputs of production at a low price and then selling the commodity at a higher price. This is simply not possible. This is due to the economic law of one price. The law of one price says “that if trade were free, then identical goods should sell for about the same price throughout the world” . What this law means is that profit cannot be made simply through the purchase and sale of goods. Price changes on the open market will force other capitalists to adjust their prices in order to be more competitive, resulting in one price.

So, where does surplus value originate? Quite simply, the origin of surplus value arises from the worker. To better understand how this happens consider the following example from Marx’s Capital Volume I. A capitalist hires a worker to spin ten pounds of cotton into yarn. Suppose the value of the cotton is one dollar per pound. The entire value of the cotton is 10 dollars. The production process naturally causes wear and tear on the machinery that is used to help produce the yarn. Suppose this wearing down of machinery costs the capitalist two dollars. The value of labor power is three dollars per day. Now also suppose that the working day is six hours. In this example the production process yields up 15 dollars, and also costs the capitalist 15 dollars. Thus there is no profit.

Now consider the process again, but this time the working day is 12 hours. In this case there is 20 dollars produced from the 20 pounds of cotton. Wear and tear on machinery now costs the capitalist four dollars. However, the value of labor power is still only three dollars per day. The entire production process costs the capitalist 27 dollars. However, the capitalist can now sell the yarn for 30 dollars. This is because the yarn still holds 12 hours of socially necessary labor time in it (equivalent to six dollars).

The key to this is that workers exchange their labor power in return for a means of subsistence. In this example, the means of subsistence has not changed; therefore the wage is still only 3 dollars per day. Notice that while the labor only costs the capitalist 3 dollars, the labor power produces 12 hours worth of socially necessary labor time. The secret of surplus value resides in the fact that there is a difference between the value of labor power and what that labor power can produce in a given amount of time. Labor power can produce more than its own value.

So, by working on materials during the production process the worker both preserves the value of the material and adds new value to the material. This value is added because of the labor that is necessary to transform the raw material into a commodity. But, according to Marx, value only exists in use-values, so how does the worker transfer value to a good? It is because “Man himself, viewed merely as the physical existence of labor power, is a natural object, a thing, although a living, conscious thing, and labor is the physical manifestation of that power”. In order for commodities to be produced with surplus value two things must be true. Man must be a living commodity, a commodity that produces labor power, and it must be the nature of this labor power to produce more than its own value.

When capitalists begin production they initially spend their money on two inputs. These inputs can be represented with the capital advanced equation: C = c + v; where C is capital advanced, c is constant capital, and v is variable capital. Constant capital is nothing more than the means of production (factories, machinery, raw materials, etc.). Constant capital has a fixed value. The value of constant capital is transferred to the commodity. However, the value added to the commodity by constant capital can never be more than the value of constant capital itself. Variable capital is labor power. Variable capital is capable of producing more value than it possesses and is the source of surplus value.

After the production process has been completed there will have been an accumulation of capital. This is represented in a slight modification of the capital advanced equation. The equation for the accumulation of capital is C’ = c + v + s. Here C’ is the value created during the production process. C’ is equal to constant capital plus variable capital plus some extra amount of surplus value (s), which arises out of variable capital. Marx says that surplus value is “merely a congealed quantity of surplus labor-time… nothing but objectified surplus labor” . To better understand the rate of surplus value one must understand that there are two parts to the working day. One part of the working day is described as necessary labor time. Necessary labor time is the amount of labor done during the working day in which a laborer “produces only the value of his labor-power”, or his means of subsistence. The second part of the working day is surplus labor time that the capitalist secures through the length of the working day. Surplus labor produces no value for the laborer, but produces value for the capitalist. So the rate of surplus value is a ratio of surplus labor time to necessary labor time. The ratio is s/v where s is surplus labor and v is necessary labor. The rate of surplus value is also referred to by Marx as the rate of exploitation.

One way in which capitalists can maximize profits is through manipulating the rate of surplus value. The most obvious way is through the increase of surplus labor time. This method is referred to as the production of absolute surplus value. In this case capitalists merely increase the length of the working day. The working day is by no means fixed, but there are limits to the working day. The limits to the working day are physical restrictions seen in human needs (eating, sleeping, etc.), and moral limits. However, this still leaves great flexibility in the amount of hours worked per day.

This flexibility in working hours leads to a class struggle between capitalist and worker. The capitalists argue that they have the right to extract all of the value from a day’s labor, since that is what they bought. Similarly, the worker demands the full value of his own commodity. The worker needs to be able to renew his labor power so that it can be sold again anew. The capitalist sees working fewer hours as theft from capital, and the worker see working too many hours as theft from laborers. This class struggle can be seen throughout history, some examples being the struggle for a 40 hour work week and trying to end child labor. It was not uncommon for workers to have shifts of 16 hours a day, or to see people die from exhaustion during their shift. Eventually laws were put in place to limit the length of a working day. This forced capitalists to find a new way in which to exploit workers.

Part Four: The Production of Relative Surplus-Value

Chapters 12 through 15 focus on the ways in which capital seeks to increase worker productivity as a means of increasing the rate of workers' exploitation.

Chapter 12: The Concept of Relative Surplus-Value

In the beginning of this chapter, Marx provides an illustration of the working day whose length is defined, and its division between necessary labor and surplus labor is marked as well. The line, AC, looks like this:
A - - - - - - - - - - B - - C
The section AB represents necessary labor, and the section BC represents surplus labor. He then poses the question, “How can the production of surplus-value be increased, i.e. how can surplus labor be prolonged, without any prolongation, or independently of any prolongation, of the line AC?” . Marx proposes that it is in the best interest of the capitalist to divide the working day like this:
A - - - - - - - - - B’ - B - - C
This is showing that the amount of surplus labor is increased, while the amount of necessary labor is decreased. Through this, part of the labor-time that was used by the worker for the worker is lost, and the lost time there would be used as labor-time for the benefit of the capitalist. When there is a change in the amount of necessary labor-time, and therefore an increase in surplus-value, Marx calls this relative surplus-value. (Whereas when there is an actual lengthening in the working day and surplus value is produced, this is called absolute surplus-value.) Marx then goes on to discuss what can decrease the value of labor-power. First, remember that the value of labor-power is “the labor-time necessary to produce labor-power” . With this in mind, Marx says that the value of labor-power can be decreased if there is an increase in the productivity of labor. But productivity of labor cannot be increased without there first being a change in the mode of production, i.e. there must be innovations in both the technical and social conditions of the process of labor. And when the value of labor-power falls alongside an increase in the productivity of labor, commodities become cheaper. Along with this, Marx states that, as the productivity of labor increases, so, too, does the relative surplus-value; on the other hand, when there is a decrease in the productivity of labor, the relative surplus-value decreases as well. In other words, there is a direct proportion between the two things. The perpetual drive of capital according to Marx is to increase the productivity of labor, so that commodities can become cheaper. Through this process, the worker himself becomes cheaper. The reader is reminded that the capitalist is not interested in the absolute value of a commodity; instead, he is concerned with the surplus-value that is there in it, a value that is recognized through the sale of that commodity. Marx concludes that, through the increase of the productivity of labor, the aim of capitalist production “is the shortening of that part of the working day in which the worker must work for himself, and the lengthening, thereby, of the other part of the day, in which he is free to work for nothing for the capitalist” .

Chapter 13: Co-operation

A group working under a capitalist does as much work as another group of the same number of people working under the same capitalist. Their skills and shortcomings balance each other out to make groups of the same number equatable. Upon dividing up groups into smaller subgroups, changes become evident. Marx states, "Of the six small masters, then, one would squeeze out more than the average rate of surplus-value, another less. The inequalities would cancel out for the society as a whole, but not for the individual masters" (p. 441). To simplify, among individual groups, there are stronger, more productive groups and weaker, less productive groups. However, when examining the subgroups as a whole, the strong balance out the weak and balance is restored. With this information Marx defines co-operation as "when numerous workers work together side by side in accordance with a plan, whether in the same process, or in different but connected processes." (p. 443). This works well for capitalists in that social contact brings people's natural competitive nature, and they produce more commodities. Co-operation also shortens the time needed to complete a given task. Marx says, "If the labour process is complicated, then the sheer number of the co-operators permits the apportionment of various operations to different hands, and consequently their simultaneous performance. The time necessary for the completion of the whole work is thereby shortened." (p. 445).

The only problem for capitalists comes with payment. It is easier for a capitalist to hire fewer people and pay them for a longer period of time than to pay many workers for a short time. In essence, the amount of capital a capitalist has to spare for payment affects how many laborers he can hire at any given time. With co-operation also comes resistance. The larger a group, the more likely they are to resist conditions implemented by the capitalist, and the more the capitalist must overcome their resistance. Marx also says, "It is not because he is a leader of industry that a man is a capitalist; on the contrary, he is a leader of industry because he is a capitalist" (p. 450). Marx concludes with a familiar example of co-operation: the creation of the pyramids. As the food grown in the Nile valley belonged to the king, he was able to commission a large number of people to work in co-operation with one another to create the pyramids in a very short amount of time.

Chapter 14: The Division of Labour and Manufacture

Section 1. The Dual Origin of Manufacture

Here Marx identifies two ways in which manufacture originates. In the first, one capitalist brings a series of workers with different trades together to work for him under the same roof so that a single product passes from one worker to the next. Under this method, tradesmen find themselves making only one type of product, “so that a locksmith working for a carriage company would make locks only for carriages when he used to make locks for a variety of different products”. The second form occurs when a capitalist hires a number of workers, each worker making an entire product himself. Under external circumstances requiring production to speed up, this method changes so that each worker is given a specific task within the making of a product. Isolated jobs on each commodity start to be assigned to individual workers, and division of labour arises.

Section 2. The Specialized Worker and His Tools

Next, Marx argues that a worker who performs only one task throughout his life will perform his job at a faster and more productive rate, forcing capital to favor the specialized worker to the traditional craftsman. In this section Marx also demonstrates that a specialized worker doing only one task can use a more specialized tool, which cannot do many jobs but can do the one job well, in a more efficient manner than a traditional craftsman using a multi-purpose tool on any specific task. Marx considers this a basic element of manufacture.

Section 3. The Two Fundamental Forms of Manufacture- Heterogeneous and Organic

In section 3, Marx argues that the production of various commodities produces a hierarchy of skilled and unskilled labor. Skilled labor requires large amounts of training or skill and tends to command a higher value of labor-power, while unskilled labor, which any man can do, takes little to no training and commands a lower value of labor-power”.. Keeping these highly specialized workers focused on keeping there highly valued job skills along with keeping them divided from their trade as a whole making of one commodity further devalues there labor power to each of them. Also one item with several menial processes (each assigned to one worker) helps to divide the workers from the value of their own labor power.

Section 4. The Division of Labour in Manufacture and the Division of Labour in Society

Marx argues that the division of labor in society has existed long before capitalism. However, Marx sees the division of labour within a factory or workshop as something totally unique to the capitalist mode of production”.. While physiological and social circumstances may mediate the division of labour in society, it is the need to produce surplus value which creates the need for a division of labour within manufacture.

Section 5. The Capitalist Character of Manufacture

Marx considers the way in which a division of labour within manufacture limits the mind and education of a worker. Marx also points to the revolution of machinery as a way to increase surplus-value by increasing the productivity of each worker thereby reducing the number of unskilled workers necessary.

Chapter 15: Machinery and Large-Scale Industry

Section 1. Development of Machinery

In this section, Marx explains the significance of machinery to capitalists and how it is applied to the work force. The goal of introducing machinery into the work force is to increase productivity and not to decrease the toil of the worker. When productivity is increased, the commodity being produced is cheapened. Relative surplus value is amplified because machinery shortens the part of the day that the worker works for his or her means of subsistence and increases the time that the worker produces for the capitalist. As discussed in previous chapters, when the time it takes for the worker to achieve their means of subsistence decreases, the more time they will spend working for the capitalist.

At this point, Marx discusses the difference between tools and machines and their application to the process of production. Marx claims that many experts, whether they are trained in mathematics, economics or experts in mechanics see no difference between tools and machines. He claims that they “ call a tool a simple machine and a machine a complex tool” (Marx 492). Marx continues to elaborate on this definition problem, explaining that some people distinguish between a tool and a machine “ by saying that in the case of the tool, man is the motive power, whereas the power behind the machine is a natural force independent of man, for instance an animal, water, wind and so on” (Marx 493). The flaw with this approach, when defining tool from machine, is illustrated when Marx points out that this argument would indicate that a plow, which is powered by an animal, would be considered to be a machine and Claussen’s circular loom, which is able to weave at a tremendous speed, is in fact powered by one worker and there fore considered to be a tool. Marx defines the machine on page 495 of capital volume I when he says “ The machine, therefore, is a mechanism that, after being set in motion, performs with its tools the same operation as the worker formerly did with similar tools. Whether the motive power is derived from man, or in turn from a machine, makes no difference here.”

There are three parts to fully developed machinery:

• 1. The motor mechanism powers the mechanism. Be it a steam engine, water wheel or a person’s caloric engine.
• 2. The transmitting mechanism, wheels, screws, and ramps and pulleys. These are the moving parts of the machine.
• 3. The working machine uses itself to sculpt whatever it was built to do.

Marx believes the working machine is the most important part of developed machinery. The working machine is what began the industrial revolution of the eighteenth century and continues to turn craft into an industry.

The Machine is able to replace a worker, who works at one specific job with one tool, with a mechanism that accomplishes the same task, but with many similar tools and at a much faster rate. One machine doing one specific task soon turns into a fleet of co-operating machines accomplishing the entire process of production. This aspect of automation enables the capitalist to replace large numbers of human workers with machines. It also enables capitalist to choose their human workforce to a much larger pool of available workers. The worker no longer need be skilled in a particular trade because their job has been reduced to oversight and maintenance of their mechanical successors.

The development of machinery is an interesting cycle where inventors started inventing machines to complete necessary tasks. The machine making industry grew larger and worker’s efforts started focusing toward building machines. With so many machines being developed, the need for new machines to create old machines increased. For example, the spinning machine started a need for printing and dying, and the designing of the cotton gin. This creation started the building of machines by other machines. “Without steam engines, the hydraulic press could not have been made. Along with the press, came the mechanical lathe and an iron cutting machine. Labor assumes a material mode of existence which necessitates the replacement of human force by natural forces” (Marx 508).

Section 2. The Value Transferred by Machinery to the Product

As we have seen in the previous section, the machine does not replace the tool, which is powered by man. The tool multiplies and expands into the working machine that is created by man. Workers now go to work not to handle the tools of production but to work with the machine, which handles the tools. It is clear that large-scale industry increase the productivity of labor to an extraordinary degree by incorporating its fast paced efficiency with in the process of production. What is not as clear is that this new increase in productivity does not require an equal increase in expended labor by the worker. Machinery creates no new value. The machine accumulates value from the labor, which went into producing it, and it merely transfers its value into the product it’s producing until its value is used up.

Only labor power, which is bought by capitalists, can create new value. Machinery transfers its value into the product at a rate, which is dependent upon how much the total value of the machinery is. “ The less value it gives up, the more productive it is, and the more its services approach those rendered by natural forces” (Marx 512). The general rule of machinery is that the labor used to create it must be less than how much human work it replaces when it is used in the process of production. Other wise, the machinery would not be effective in raising surplus value and instead depreciate it. This is why some machinery is not chosen to replace actual human workers. It would not be cost effective.

Section 4. The Factory

Marx begins this section with two descriptions of the factory as a whole.

“Combined co-operation of many orders of workpeople, adult and young, in tending with assiduous skill, a system of productive machines, continuously impelled by a central power” (the prime mover); on the other hand, as “a vast automaton, composed of various mechanical and intellectual organs, acting in uninterrupted concert for the production of a common object, all of them being subordinate to a self-regulated moving force.” (544-545)

This twofold description shows the characteristics of the relationship between the collective body of labor power and the machine. In the first description, the workers, or collective labor power, are viewed as separate entities from the machine. In the second description, the machine is the dominant force, with the collective labor acting as mere appendages of the self operating machine. Marx uses the latter description to display the characteristics of the modern factory system under capitalism.

In the factory, the tools of the worker disappear, and the worker’s skill is passed on to the machine. The division of labor and specialization of skills re-appear in the factory, only now as a more exploitative form of capitalist production. Work is still organized into co-operative groups. Work in the factory usually consists of two groups, people who are employed on the machines and those who attend to the machines. The third group, outside of the factory, is a superior class of workers, trained in the maintenance and repair of the machines.

Factory work begins at childhood to ensure that a person may adapt to the systematic movements of the automated machine, therefore increasing productivity for the capitalist. Marx describes this work as being extremely exhausting to the nervous system and void of intellectual activity. Factory work robs workers of basic working conditions like clean air, light, space, and protection. Marx ends the section by asking if Fourier was wrong when he called factories ‘mitigated jails’?

Section 5. The Struggle between Worker and Machine

In the beginning of this section Marx recounts the introduction of machinery and the resistance among workers that followed it. Marx does not criticize the machines themselves or technology, but the capitalist system that envelopes the machines. He states that,

“It took both time and experience before workers learned to distinguish between machinery and their employment by capital, and therefore to transfer their attacks from the material instruments of production to the form of society which utilizes those instruments.” (554)

Marx describes the machine as the instrument of labor for the capitalists’ material mode of existence. The machine competes with the worker, diminishing the use-value of the worker’s labor-power. Marx also points out that with the advance in technology of machines led to the substitution of less skilled work for more skilled work which ultimately led to a change in wages. During the progression of machinery the numbers of skilled workers decreased, while child labor flourished, increasing profits for the capitalist.

Section 6. The Compensation Theory, With Regard to the Workers Displaced by Machinery

In this section, Marx sets forth to illuminate the error within the compensation theory of the political economists. According to this theory, the displacement of workers by machinery will necessarily “set free” an equal stable, amount of variable capital previously used for the purchase of labor-power and remains available for the same purpose. However, Marx argues that the introduction of machinery is simply a shift of variable capital to constant capital. The capital “set free” cannot be used for compensation since the displacement of variable capital available becomes embodied in the machinery purchased. The capital that may become available for the compensation will always be less than the total amount of capital previously used to purchase labor-power before the addition of machinery. Furthermore, the remainder of variable capital available is directed towards hiring workers with the expertise skills to operate new machinery. Therefore the conversion of the greater part of the total capital is now used as constant capital, a reduction of variable capital necessarily follows. As a result of machinery, displaced workers are not so quickly compensated by employment in other industries but are forced into an expanding labor-market at a disadvantage and available for greater capitalist exploitation without the ability to procure the means of subsistence for survival. Furthermore, Marx argues that the introduction of machinery may increase employment in other industries, yet this expansion “has nothing in common with the so-called theory of compensation”. Greater productivity will necessarily generate an expansion of production into peripheral fields that provide raw materials. Conversely machinery introduced to industries that produce raw materials will lead to an increase in those industries that consume them. The production of greater surplus-value leads to greater wealth of the ruling classes, an increase in the labor-market, and consequently the establishment of new industries. As such Marx cites the growth of the domestic service industry equated to greater servitude by the exploited classes.

Section 7. Repulsion and Attraction of Workers Through The Development of Machine Production, Crises in the Cotton Industry

The political economist apology for the displacement of workers by machinery asserts that there is a corresponding increase in employment. Marx is quick to cite the example of the silk industry in which an actual decrease of employment appears simultaneously with an increase of existing machinery. On the other hand an increase in the number of factory workers employed is the result of “the gradual annexation of neighboring branches of industry” and “the building of more factories or the extension of old factories in a given industry.” Furthermore, Marx argues that an increase in factory workers is relative since the displacement of workers creates a proportionately wider gap between the increase of machinery and a proportionate decrease of labor required to operate that machinery. The constant expansion of capitalism and ensuing technical advances leads to extension of markets until it reaches all corners of the globe thus creating cycles of economic prosperity and crisis. Finally, the “repulsion and attraction” of workers therefore results as a cycle in which there is a constant displacement of workers by machinery which necessarily leads to increased productivity followed by a relative expansion of industry and higher employment of labor. This sequence renews itself as all components of the cycle lead to novel technological innovation for "replacing labor-power."

Part Five: The Production of Absolute and Relative Surplus-Value

Chapters 16-18 examine how the capitalist strategies for the production of both absolute and relative surplus-value are combined and can function simultaneously.

Chapter 16: The Rise of Surplus Value

Marx describes the process of taking the workers individual productive actions and making them a collective effort of many workers. This action takes the worker further away from the actual production of the commodity and then allows the capitalist to use the worker only to create surplus value. The surplus value is increased first through absolute methods, such as extending the work day, then through relative methods, such as increasing worker productivity. These actions are the general foundations of capitalism as described by Marx.

The worker’s transformation from producer of commodities for use in survival to producer of surplus value is necessary in the progression to capitalism. In production outside the capitalist system the worker produces everything they need to survive. When the worker moves beyond producing what they need to survive, they can provide their work for a wage and create part of some product in return for a wage to buy what they need to survive. Capitalism takes advantage of this extra time by paying the worker a wage that allows them to survive but is less than the value the same worker creates. Through large scale manufacturing and economies of scale the workers are placed progressively further away from manufacturing products themselves and only function as part of a whole collective that creates the commodities. This changes the concept of productive labor from the production of commodities to the production of surplus value (pg. 644). The worker is only productive to the capitalist if they can maximize the surplus value the capitalist is earning.

Not simply content with the transformation of the worker from a creator of commodities to creator of surplus value, capitalist must devise new ways to increase the surplus that he is receiving. The first, or absolute, way the capitalist can increase surplus value is through the prolongation of the working day so the worker has more time to create value (pg. 646). The second, or relative, way the capitalist can increase surplus value is to revolutionize changes in the production method (pg. 646). If the worker can only produce the means for himself in the time he works during the day there would be no extra time for him to create surplus value for the capitalist. The capitalist must then either enable the worker to complete the paid work time more quickly through relative means, or he must increase the work day in absolute terms. Without enabling unpaid work to exist the capitalist system would not be able to sustain itself.

With surplus labor resting on a natural basis, there are no natural obstacles preventing one man from imposing his labor burden on another. As a worker looks into the possible options of getting out of capitalist exploitation or the initial “animal condition”, one of the obvious options is becoming a capitalist himself. This is called socialized labor which exists when the surplus labor of one worker becomes necessary for the existence of another. Marx mentions two natural conditions of wealth that are helpful in understanding the progression of socialized labor over time. The two conditions are natural wealth in the means of subsistence and natural wealth in the instruments of labor. Over time, society has moved more from the former to the latter. It wasn’t that long ago that the majority of society produced for themselves and didn’t have to be concerned about producing surplus labor for others. We did labor for others, but it was not in effort to create surplus value, it was to help others.

Marx uses the Egyptians as an example to illustrate a society’s potential when there is extra time that doesn’t have to be used toward creating surplus value. The Egyptians lived in a very fertile land (natural subsistence wealth) so could raise children at a very low cost. This is the main reason why the population grew so large. One might think all the great Egyptian structures were possible because of the large population, but is due to the availability of labor time. In regards to capitalism, you might think that a greater natural wealth of subsistence would result in greater growth and capitalist production (like the Egyptians), but that is not the case. So why is capitalism so strong in many countries that don’t have excess natural resources? The answer is the necessity of bringing a natural force under the control of society (irrigation in Persia and India, flow of water in Egypt, etc.) As Marx says, “favourable conditions provide the possibility, not the reality of surplus labour.”

Marx displays an example of surplus labor occurring in these favorable conditions in the case of the East Indies. The inhabitants would be able to produce enough to satisfy all of his needs with only twelve working hours per week. This provides for more than enough leisure time until capitalist production takes hold. Then he may be required to work six days per week to satisfy his needs – there can be no explanation of why it is necessary for him to provide the extra five days of surplus labor.

Marx then critiques famed economist David Ricardo and the lack of addressing the issue of surplus-value. Ricardo does not take the time to discuss the origin of surplus-value and side-stepped the entire issue altogether. Agreeing with classical economists, John Stuart Mill finds that the productive power, surplus value, is the source of profits, but adds that the necessities of life take less time to produce than is required by society. Therefore, this becomes the reason capital will realize a profit. Mill goes on to assert that profit can only be gleaned from productive power and not exchange which falls in line with Marx’s theories.

The next critique of Mill goes on to the percentage that is gained from the laborer. Marx finds it to be “absolutely false” in the fact that the percentage of surplus labor will always be more than the profits. This is due to the amount of capital invested. Following his conclusions, Marx calls Mill’s ideas an optical illusion as he looks into the advancing of capital. Mill looks at laborers and considers them to be a form of capitalist – they are advancing the capitalist their labor ahead of time and receiving it at the end of the project for more of a share. Marx hits the idea out with the analogy of the American peasant being his own slave as he is doing forced labor for himself.

Karl Marx examined surplus value and showed it to be a necessity in capitalism. This surplus value is derived from the difference between the value the worker creates and the wage he earns. Chapter 16 looked into the ways in which the capitalist is able to increase surplus-value and takes a direct attack against economists David Ricardo and John Stuart Mill.

Chapter 17: Changes of Magnitude in the price of Labor-Power and in Surplus-Value

The Value of Labor power, also known as wage, is the first thing that Marx begins to re-explain in the opening of the chapter stressing that it is equal to the quantity of the “necessaries of life habitually required by the average laborer.” By re-stressing the importance of this concept he is building a foundation on which he can begin to elaborate his argument on the changing price of labor. In order to make his argument, Marx states that he will leave out two certain factors of change (the expenses of labor power that differ with each mode of production and the diversity of labor power between men and women, children and adults) and that he will also be making two assumptions. The two assumptions made are first, the commodities are sold at their values, and second, the price of labor-power occasionally rises above its value, but never falls beneath it.

Given these assumptions Marx begins to formulate his argument by first establishing the three determinants of the price of labor power. These three determinants, or circumstances as Marx calls them, are: the length of the working day, the normal intensity of labor, and the productiveness of labor. Formulating these three circumstances into different combinations of variables and constants Marx begins to clarify the changes in Magnitude in the price of labor-power. The majority of Chapter XVII is dedicated to the chief combinations of these three factors.

“I. Length of the working day and Intensity of labor constant; Productiveness of labor variable.”

Starting out with these assumptions Marx explains that there are three laws that determine the value of labor-power. The first of these three laws states that a working day of given amount of hours will always produce the same amount of value. This value will always be a constant, no matter the productiveness of labor, or the price of the commodity produced. The second states that the surplus-value and labor-power are negatively correlated or that when surplus-value increases a unit and value stays the same labor-power must decrease one unit also. The third of these laws is that a change in surplus-value presupposes a change in that of the labor-power.

Given these three laws Marx explains how the productiveness of labor, being the variable, changes the magnitude of labor-value. Marx explains saying “a change in the magnitude of surplus-value, presupposes a movement in the value of labour-power, which movement is brought about by a variation in the productiveness of labour.” This variation in the productiveness of labor is what eventually leads to the developing change in value, which is then divided by either the laborers, through extra labor-value, or the capitalist, through extra surplus value.

“II. Working-day constant; Productiveness of labor constant; Intensity of labor.” The Intensity of labor is the expenditure that the laborer puts into a commodity. The increase in the intensity of labor results in the increase of value that the labor is producing. This increase that the laborer is producing is again divided amongst the capitalist and laborer in the form of either surplus-value or an increase in the value of labor power. Though they may both increase simultaneously the addition to the labor may not be an addition if the extra payment received from his increase in intensity does not cover the wear and tear it has on the laborer.

“III. Productivity and Intensity of Labor Constant; Length of Working Day Variable.” In this example it is possible to change the length of the working day by either lengthening of shortening the time spent at work. Leaving the other two variables constant, reducing the length of the work day leaves the labor-power’s value the same as it was before. This reducing of the length of the work day will reduce the surplus labor and surplus value dropping it below its value.

The other option in changing the workday is to lengthen it. If the labor-power stays the same with a longer workday then the surplus-value will increase relatively and absolutely. The relative value of labor-power will fall even though it will not absolutely. With the lengthening of the workday and the nominal price staying the same, the price of labor-power possibly could fall below its value. The value is estimated to be what is produced by the worker and a longer workday will affect the production and therefore the value. It is fine to assume the other variables stay constant, but a change in the work day with the others constant will not result in the outcomes supposed here. A change in the work day by the capitalists will most definitely affect the productivity and intensity of the labor.

“IV. Simultaneous Variations in the Duration, Productivity and Intensity of Labor.”

In the real world it is almost never possible to isolate each of the aspects of labor. Two or even three of the variables may vary and in different aspects. One may move up while another moves down, or in the same direction. The combinations are endless, but may be characterized by the first three examples. However, Marx limits his analysis to two cases.

“(1) Diminishing productivity of labor with a simultaneous lengthening of the workday.” This example is one where workers are working longer hours paying less attention or dedication on the job and productivity is in turn reduced; or productivity decreases, increasing the workday to achieve the same output. Therefore, the magnitude of these changes will continue on its path causing longer and longer workdays with lower productivity until the system can sustain no more.

“(2) Increasing intensity and productivity of labor with simultaneous shortening of the working day.” Productivity and intensity are closely related and offer similar outcomes. Higher productivity and intensity will increase the workers output allowing for the workday to be shorter as they will achieve their necessary subsistence. The working day can shrink multiple times so long as the other elements live up to their sides of the bargain.

The price of labor-power is affected by many things that can be broken down. The three main elements of intensity, productivity and length of workday were broken down and analyzed separately and then together. From the examples presented it is possible to see what would happen in any and all situations.

Part Six: Wages

Chapters 19-22 examine the ways in which capital manipulates the money wage as ways of both concealing exploitation and of extorting increased amounts of unpaid labor from workers.

Chapter 19: The Transformation of the Value (and Respective Price) of Labour-Power into Wages

In this chapter Marx brings into perspective how wages fit into the picture of capitalism. Marx begins by noticing how oblivious society is when it speaks "of the value of labour and call its expression in money its necessary or natural price"(675). A laborer is interested primarily in meeting his means of subsistence; therefore, he is easily exploited by the capitalist, who, is more interested in paying him as little as possible than endowing him with an equal exchange for the value he creates. As selling this labor-power is a way of ensuring the means of subsistence, laborers are willing to sell their labor power to a capitalist, for whom he will serve a specific function. However, Marx shows how the capitalist uses the wage he pays to his worker to disguise what is actually being paid out. He begins by showing us how payment works under three different systems. First under the old corvee system or feudal system the laborer understands that the labor he does on his land is for him-self and the labor he does on the land of his lord belongs to his lord. There is no misunderstanding of what the laborer is producing for himself and the lord. The same is true for the slave. Although some of his labor is for his means of subsistence, the slave knows his labor is mostly surplus for his master. However, to the wage laborer it appears as though he is being paid the value of his labor. Unfortunately for the laborer what he is being paid for is his labor power, not the amount of labor he produced. Therefore, despite the fact the laborer thinks he is being paid for all his labor he is actually only creating surplus value for the capitalist. “All the notions of justice held by both the worker and the capitalist, all the mystifications of the capitalist mode of production, all capitalism’s illusions about freedom, all the apologetic tricks of vulgar economics, have as their basis the form of appearance discussed above, which makes the actual relation invisible, and indeed presents to the eye the precise opposite of that relation (680). This is how the capitalist is able to further exploit the worker when it comes to paying him a wage.

Chapter 20: Time-Wages

The first fundamental form of wage that Marx analyzes take the form of time-wages. The sale of labor-power is always for a definite period of time. This time may be that of a day, week, etc. The money that the worker receives at the end of this period is referred to by Marx as his nominal wage. According to the length of the working day, the same daily or weekly (nominal) wage may represent drastically different prices of labor. This average price of labor can be determined by dividing the average daily value of labor-power (nominal wage) by the number of hours in the working day. A rise in the number of hours in a working day correlates to a fall in the price of labor. This is a means of lowering the price of labor independent of the workers daily or weekly nominal wage. Even if the wage of the worker rises, it can still remain constant or even fall depending upon a rise in the hours worked.

Hourly wages may now be employed by the capitalist to obscure and even annihilate the connection between the value of the workers' labor-power and the value of his labor. This occurs when there ceases to be a set number of hours in the workday. The capitalist can now employ the worker for a period of the working day where the worker creates surplus value, while not employing him long enough so that he expends enough labor time to provide for his own subsistence. For the worker then to provide the means of subsistence for himself, he must work extra hours. Marx notes the dual benefits to the capitalist in this situation, "If one man does the work of 1 1/2 or 2 men, the supply of labor increases, although the supply of labor-power on the market remains constant. The competition thus created between the workers allows the capitalist to force down the price of labor, while the fall in price allows him, on the other hand, to force up the hours of work even further."

Time wages encourage the belief, both to the capitalist and the worker, that labor is being bought directly, when in reality it is the labor-power that is being bought and subsequently exploited.

Chapter 21: Piece-Wages

Marx explains the exploitative nature of the piece-wage system. Under this system workers are paid a pre-determined amount for each piece they produce, creating a modified form of the time-wage system. A key difference is in the fact that the piece-wage system provides an exact measure of the intensity of labor. Meaning that the capitalists’ know about how long it takes to produce one piece of finished product. Those who cannot meet these standards of production will not be allowed to keep their jobs. This system also allows for middlemen to usurp positions between the capitalists and laborers. These middlemen make their money solely from paying labor less than capitalists are actually allotting, thus, bringing about worker on worker exploitation. Logic would lead a laborer to believe that straining one’s labor power “as intensely as possible” works in one’s own interests because the more efficiently they produce the more they will be paid. Therefore, the workday will lengthen to the extent that worker’s allow and necessitate. However, prolongation in the workday requires the price of labor to fall. Marx elucidates that, “The piece-wage therefore has a tendency, while raising the wages of individuals above the average, to lower this average itself”, and “it is apparent that the piece-wage is the form of wage most appropriate to the capitalist mode of production.” Marx gives examples of the Weaving Industry around the time of the Anti-Jacobin War where "piece-wages had fallen so low that in spite of the very great lengthening of the working day, the daily wage was then lower than it had been before." So in this example we are able to see how piece-wages do nothing but decrease the value of labor and better disguise the true way the workers are exploited..

Part Seven: The Process of Accumulation of Capital

Chapters 23-25 explore the ways in which profits are used to recreate capitalist class relations on an ever expanding scale and the ways in which this expansion of capitalism creates periodic crises for capitalist accumulation. For Marx, these crises in accumulation are also always crises in the perpetuation of the class relations necessary for capitalist production and so are also opportunities for revolutionary change.

Chapter 23: Simple Reproduction

Just as a society cannot stop consuming, it cannot stop producing. “Every social process of production,” writes Marx, “is at the same time a process of reproduction.” This is one of Marx’s most important points, for capital must be seen as a forever developing value. Since labor power and the means of production are constantly consumed in the process of production, they must be reproduced for production to continue.

Simple reproduction refers to a capitalist consuming all of the surplus value created and reinvesting the same amount of capital during each cycle. This causes production levels to remain constant.

Marx pauses here to clarify two points. First, though workers are seemingly paid in money, in actuality they are paid in wages. Off the clock, in order for workers to obtain part of their means of subsistence, they must give these wages back to the capitalist class. “The transaction,” Marx writes, “is veiled by the commodity-form of the product and the money-form of the commodity.”

Second, Marx points out that the capitalist must produce surplus value in order for production to continue. If surplus value is not created, and the capitalist keeps advancing capital (and consuming) from his own pocket, he will eventually go broke. Simple reproduction therefore “converts all capital into accumulated capital.”

Part of the cycle of simple reproduction is the replication of class relations. Workers receive enough to keep them at work and purchase their means of subsistence. “The worker always leaves the process in the same state as he entered it – a personal source of wealth, but deprived of any means of making that wealth a reality for himself.” Since there is nothing left over after purchasing their means of subsistence, they must sell their labor power again. The wages paid to him are for the labor power consumed last pay period, so the worker is providing credit to the capitalist without any additional interest or return. In this way workers remain poor and remain at work. Meanwhile, the capitalists advance capital, create surplus value, and are able to profit and reinvest. All of the surplus value doesn’t remain with the capitalist, he must spend it on more means of production and this keeps other capitalists able to create surplus value for themselves. Marx also points out that all initial capital is transformed into accumulated capital – appropriated from the surplus value of the labor. Used to purchase new but greater means of production uses up the surplus in a continual cycle. The worker, selling his labor power, alienates it from himself and in doing so, produces more surplus value for the capitalist. The capitalist, in turn, produces the wage laborer – by the simple process of buying and selling from one another. Here lies the basis for the class struggle.

Chapter 24: The Transformation of Surplus-Value into Capital

In Chapter 24, Marx explains how capitalists are able to transform surplus value into more capital. Marx begins by expounding upon the accumulation of capital, which he defines as “the employment of surplus-value as capital, or its reconversion into capital.” Marx uses the illustration of a cotton yarn spinner to demonstrate how capitalists use more money to invest in more means of production and labor-power. Thus, Marx is able to further reiterate that, “accumulation requires to the transformation of a portion of the surplus product into capital.” Marx further elaborates that the reason why surplus-value can be transformed into capital is because the surplus product “already comprises the material components of a new quantity of capital."

Capitalist expansion, according to Marx, requires additional labor-power. Marx explains that the “mechanism of capitalist production” is constantly producing and reproducing a working class that depends on wages to survive, thus replenishing the capitalist need for labor-power and thereby aiding capitalist expansion. Labor power used to reproduce the worker cannot be done without always creating more surplus value that benefits the capitalist. The basic biological requirements of eating and sex will continue to work to the capitalist’s advantage, creating a replacement labor force without the capitalist having to supervise this. Marx states that what is true of all accumulated capital in comparison to the addition of capital made by it is that “the original capital continues to reproduce itself and to produce surplus-value alongside the newly formed capital.”

Marx lists three results of the original transformation of money: (1) that the product belongs to the capitalist and not the worker; (2) that the value of this product includes, apart from the value of the capital advance; a surplus-value which costs the worker labour but the capitalist nothing, and which nonetheless becomes the legitimate property of the capitalist; (3) that the worker has retained his labour-power and can sell it anew if he finds another buyer.

Marx, therefore concludes, that even in simple reproduction all capital is made into accumulated capital; despite the fact that the capital originally advanced begins to diminish when compared to the directly accumulated capital.

Chapter 25, Section 3 & 4: The General Law of Capitalist Accumulation

Composition of capital is broken into two parts – labor value and means of production. The organic composition is a basic split between the two with each remaining the same. This leads to requiring more labor power with higher wages. When machinery is introduced to increase productivity, the composition of capital undergoes a qualitative change. The composition of capital undergoes a qualitative change when the total social capital of a society grows, or accumulates. This accumulation presupposes an increase in productivity and efficiency in the affected industries and consequently produces a decreased need for labor in general. If productivity increases (i.e. if there are more machines that take the place of human labor) then there is less employment; for even if the total quantity of labor employed increases, it is in a “constantly diminishing proportion” to the average amount needed by capital for the valorization process. Thus accumulation creates an industrial reserve army of labor that is available for hire. Conversely, if productivity and accumulation is stagnant, or the cost-benefit ratio of machine power to labor power is unfavorable, there exists a greater need for labor to create surplus value. But this is not what a capitalist wants and is antithetical to the ethos of capitalist production. What a capitalist wants is increased productivity and thus the increased production of relative surplus value. By making fewer workers (in proportion to the total population and need for labor) work more productively, and thus put more of their labor time into producing surplus value, there is less need to employ more workers, and the superfluous workers already employed can be discarded. Marx states that this creates a division in the working class of a nation; the forcibly unemployed industrial reserve army already mentioned, versus an employed class of workers who are chronically underpaid and overworked. This affects wages in two ways. If there is a high level of industrial reserve workers in proportion to a low level of employed workers, then obviously demand for labor is low and thus wages are low. Conversely, if there are few in the industrial reserve and many people employed, thus accelerating accumulation, then demand for labor is high and wages are high. However, this upward trend in employment always reaches a critical mass when too much is produced and there are not enough consumers to absorb it, and thus products (and therefore surplus value) go to waste. Then workers are “set free,” wages drop for those still employed, and the cycle begins anew. At a point where the labor costs become too high, the capitalist will stop transforming money into capital and cease production. This leads to more unemployment, which drives wages down once again. The end result will be to produce both bigger capitalists and more poor workers. This is the workers paradox; work harder, produce more, but get fired in the end because they produced too much. As the total social wealth of a nation grows, so does its population, and as its population suffers through the abovementioned cycle, the more people become unemployed due to their own productivity. That is essentially the absolute general law of capitalist accumulation.

Part Eight: So-Called Primitive Accumulation

Primitive accumulation explains how other forms of production such as feudalism transformed into capitalist production. Marx states that in order for this accumulation of capital to occur there must be the existence of two classes, the first class is are the Capitalist, who are the owners of the means of production, and then there are the workers, whose labor power comes to the Capitalist at no cost. The “secret” of this accumulation is that it stems from a history of violence and brutality. The expropriation of peasant from the common lands was the ultimate driving force behind the process of primitive accumulation.

The last third of the 15th century marked the beginning of the rise of capitalist mode of production and the initial creation of the working class. However before this occurred feudalism ruled England. Feudalism consisted of “free peasant proprietors.” In this type of system peasants used the common lands for their own subsistence. But by the end of the fifteenth century the expropriation of lands had begun. This meant than the common lands soon became private property to the soon- to-be capitalist land owners. As a result the peasants no longer had their means of subsistence and were forced into wage labor jobs in order to survive. Because many people were not used to selling their labor power in order to survive, they often resorted to begging or thievery. As a result punishments against vagabonds became more severe. Thomas More indicates that as many as 72,000 were put to death infer the pretext of theft.

After the expropriation of lands many landowners gave land to farmers in which they worked the land to pay rent and meet their means of subsistence. The continual rise in prices of agricultural products, the diminishing price of rent and value of precious metals, allowed the farmer to hire wage laborers and make money at the expense of the workers and landlords. This led to the increasing control of the emerging class of capitalist farmer.

The Agricultural Revolution had a great impact upon capitalist production. As result of new technology in agricultural production less farm workers were needed, this caused a rise in the number of wage laborers. But in order to have large scale agriculture their needs to be large scale machinery. This large scale machinery was ultimately built by the people who were expropriated from the land.

Deprived of their traditional means of subsistence, many of these displaced farmers and artisans found themselves faced with few options for survival, and therefore they themselves became capitalists. In this sense, workers parted with tangible property ownership in exchange for capital with no legal right to the property used for its production. The worker is deprived power over the land and goods that they are expected to maintain through forced, and waged-labor. As the capitalist mode of production grew so did the need for wage laborers. This caused capitalist to resort to forms of enslavement of indigenous cultures, and even child labor. Even famine became a tool for capitalist generation in 1769-1770 when England bought up rice for the purpose of selling it at a disproportionately larger profit (917). Encouraged to participate in the creation of debt, each worker participates in the creation of “joint-stock companies, the stock-exchange and modern bankocracy” (919). The international credit system conceals the source of its generation, the exploitation of slave and wage laborers. Taxpayers keep buying into these credit systems and paying taxes, but are not able to escape either system. In fact, for any person involved in this system they themselves cannot escape capital’s bloody roots (926).

Marx stresses that once workers are forced into wage-laboring jobs they no longer have rights to private property because they have been expropriated from the lands. The only thins workers own is their labor power. This means they are free proprietors of the conditions of their labor(927). Private property is now replaced with capitalist private property, by the highest form of exploitation, and we now see the shift from the days of free labour to immigrant/alien labour. In order to make gains in capital, a capitalist must exploit his worker so that some form of surplus is created. Capitalist private property is formed from the capital mode of appropriation, which has dwindled away the once existent private property that was founded on personal labour of workers. However Marx states that as capitalism grows so does the number of the wage laborers. As a result eventually there will be a revolution in which the Capitalist are expropriated from their means of wealth from the majority. Marx stresses that the demise of capitalism does not necessarily mean the return of private property. "It does not re-establish private property, but it does indeed establish individual property on the basis of the achievements of the capitalist era: namely co-operation and the possession in common of the land and the means of production produced by labour itself." That is to say that the transformation of capitalist private property, which already sustains itself by society, into social property.

Marx states that two types of private property exist in a political economy. The first form, being the labor of the producer himself and the form other rests in the capitalist exploitation of others. However capitalist constantly find obstacles in the colonies where workers work for their own enrichment rather than that of the capitalist. The capitalist overcomes this obstacle by the use of force, and by the backing of the “mother land”. If domination over the workers free will cannot be achieved, Marx then asks, "how did capital and wage-labour come into existence?" This comes about through the division of workers into owners of capital and owners of labour and the workers have essentially expropriated themselves in order to accumulate capital. This self-expropriation served as primitive accumulation and therefore the catalyst for capitalism in the colonies. Marx states that in order for the accumulation of capital to occur, the producer must be expropriated from private property, and exploited through the means of wage labor.

See also

• Capital, Volume II
• Capital, Volume III

External links

• http://davidharvey.blip.tv/posts?view=archive&nsfw=dc ( A close reading of the text of Karl Marx’s Capital, Volume I with the Distinguished professor David Harvey )
• http://davidharvey.org/
• Capital in Lithographs, by Hugo Gellert.
• Capital, Volume I, by Karl Marx.
• Capital, Volume I in audio format, from LibriVox.
• Japan gives a comic twist to 'Das Kapital'
• Reading Marx’s Capital An open course consisting of a close reading of the text of Marx's Capital Volume I in 13 video lectures with David Harvey
• Reading Notes on Marx's Capital, by Michael Hardt.
• Study Guide to Capital, Volume I, by Harry Cleaver.
• Synopsis of Capital, Volume I, by Friedrich Engels.
• The MarX-Files: Resources on Karl Marx and Friedrich Engels