First Manuscript
WAGES OF LABOR
Wages are determined by the fierce struggle
between capitalist and worker. The capitalist inevitably wins. The
capitalist can live longer without the worker than the worker can live
without him. Combination among capitalists is habitual and effective,
while combination among the workers is forbidden and has painful
consequences for them. In addition to that, the landowner and the
capitalist can increase their revenues with the profits of industry,
while the worker can supplement his income from industry with neither
ground rent nor interest on capital. This is the reason for the
intensity of competition among the workers. It is, therefore, only for
the worker that the separation of capital, landed property, and labor,
is a necessary, essential, and pernicious separation. Capital and
landed property need not remain constant in this abstraction, as must
the labor of the workers.
So, for the worker, the separation of capital, ground rent, and labor,
is fatal.
For wages, the lowest and the only necessary rate is that required for
the subsistence of the worker during work and enough extra to support a
family and prevent the race of workers from dying out. According to
[economist Adam] Smith, the normal wage is the lowest which is
compatible with common humanity --
i.e., with a bestial
existence. [See Smith,
The Wealth of Nations, 2 vols., Everyman
edition, Vol. I, p. 61.]
The demand for men necessarily regulates the production of men, as of
every other commodity. If the supply greatly exceeds the demand, then
one section of the workers sinks into beggary or starvation. The
existence of the worker is, therefore, reduced to the same condition as
the existence of every other commodity. The worker has become a
commodity, and he is lucky if he can find a buyer. And the demand on
which the worker's life depends is regulated by the whims of the
wealthy and the capitalists. If supply exceeds demand, one of the
elements which go to make up the price -- profit, ground rent, wages --
will be paid below its
price. A part of these elements is,
therefore, withdrawn from this application, with the result that the
market price gravitates towards the natural price as the central point.
But 1. it is very difficult for the worker to direct his labor
elsewhere where there is a marked division of labor; and 2. because of
his subordinate relationship to the capitalist, he is the first to
suffer.
So the worker is sure to lose and to lose most from the gravitation of
the market price towards the natural price. And it is precisely the
ability of the capitalist to direct his capital elsewhere which either
drives the worker, who is restricted to one particular branch of
employment, into starvation or forces him to submit to all the
capitalist's demands.
The sudden chance fluctuations in market price hit ground rent less
than that part of the price which constitutes profit and wages, but
they hit profit less than wages. For every wage which rises, there is
generally one which remains stationary and another which falls.
The worker does not necessarily gain when the capitalist gains, but he
necessarily loses with him. For example, the worker does not gain if
the capitalist keeps the market price above the natural price by means
of a manufacturing or trade secret, a monopoly or a favorably placed
property.
Moreover, the prices of labor are much more constant than the prices of
provisions. They are often in inverse proportion. In a dear year, wages
drop because of a drop in demand and rise because of an increase in the
price of provisions. They, therefore, balance. In any case, some
workers are left without bread. In cheap years, wages rise on account
of the rise in demand, and fall on account of the fall in the price of
provisions. So they balance. [Smith, I, pp. 76-7.]
Another disadvantage for the worker:
The price of the labor of different kinds of workers varies much more
than the profits of the various branches in which capital is put to
use. In the case of labor, all the natural, spiritual, and social
variations in individual activity are manifested and variously
rewarded, were as dead capital behaves in a uniform way and is
indifferent to
real individual activity.
In general, we should note that where worker and capitalist both
suffer, the worker suffers in his very existence while the capitalist
suffers in the profit on his dead mammon.
The worker has not only to struggle for his physical means of
subsistence; he must also struggle for work --
i.e., for the
possibility and the means of realizing his activity.
Let us consider the three main conditions which can occur in society
and their effect on the worker.
(1) If the wealth of society is decreasing, the worker suffers
most, although the working class cannot gain as much as the property
owners when society is prospering, none suffers more cruelly from its
decline than the working class. [Smith, I, p. 230.]
(2) Let us now consider a society in which wealth is increasing.
This condition is the only one favorable to the worker. Here,
competition takes place among the capitalists. The demand for workers
outstrips supply. But:
In the first place, the rise of wages leads to overwork among the
workers. The more they want to earn the more they must sacrifice their
time and freedom and work like slaves in the service of avarice. In
doing so, they shorten their lives. But this is all to the good of the
working class as a whole, since it creates a renewed demand. This class
must always sacrifice a part of itself if it is to avoid total
destruction.
Furthermore, when is a society in a condition of increasing prosperity?
When the capitals and revenues of a country are growing. But this is
only possible
(a) as a result of the accumulation of a large quantity of
labor, for capital is accumulated labor; that is to say, when more and
more of the workers' products are being taken from him, when his own
labor increasingly confronts him as alien property and the means of his
existence and of his activity are increasingly concentrated in the
hands of the capitalist.
(b) The accumulation of capital increases the division of labor,
and the division of labor increases the number of workers; conversely,
the growth in the number of workers increases the division of labor,
just as the growth in the division of labor increases the accumulation
of capital. As a consequence of this division of labor, on the one
hand, and the accumulation of capitals, on the other, the worker
becomes more and more uniformly dependent on labor, and on a
particular, very one-sided and machine-like type of labor. Just as he
is depressed, therefore, both intellectually and physically to the
level of a machine, and from being a man becomes an abstract activity
and a stomach, so he also becomes more and more dependent on every
fluctuation in the market price, in the investment of capital and in
the whims of the wealthy. Equally, the increase in that class of men
who do nothing but work increases the competition among the workers and
therefore lowers their price. In the factory system, conditions such as
these reach their climax.
(c) In a society which is becoming increasingly prosperous, only
the very richest can continue to live from the interest on money. All
the rest must run a business with their capital, or put it on the
market. As a result, the competition among the capitalists increases,
there is a growing concentration of capital, the big capitalists ruin
the small ones, and a section of the former capitalists sinks into the
class of the workers -- which, because of this increase in numbers,
suffers a further depression of wages and becomes even more dependent
on the handful of big capitalists. Because the number of capitalists
has fallen, competition for workers has increased, the competition
among them has become all the more considerable, unnatural and violent.
Hence, a section of the working class is reduced to beggary or
starvation with the same necessity as a section of the middle
capitalists ends up in the working class.
So, even in the state of society most favorable to him, the inevitable
consequence for the worker and early death, reduction to a machine,
enslavement to capital which piles up in threatening opposition to him,
fresh competition and starvation or beggary for a section of the
workers.
An increase in wages arouses in the worker the same desire to get rich
as in the capitalist, but he can only satisfy this desire by
sacrificing his mind and body. An increase in wages presupposes, and
brings about, the accumulation of capital, and thus opposes the product
of labor to the worker as something increasingly alien to him.
Similarly, the division of labor makes him more and more one-sided and
dependent, introducing competition from machines as well as from men.
Since the worker has been reduced to a machine, the machine can
confront him as a competitor. Finally, just as the accumulation of
capital increases the quantity of industry and, therefore, the number
of workers, so it enables the same quantity of industry to produce a
greater quantity of products. This leads to overproduction and ends up
either by putting a large number of workers out of work or by reducing
their wages to a pittance.
Such are the consequences of a condition of society which is most
favorable to the worker --
i.e., a condition of growing wealth.
But, in the long run, the time will come when this state of growth
reaches a peak. What is the situation of the worker then?
(3) "In a country which had acquired that full complement of
riches... both the wages of labor and the profits of
stock would probably be very low... the competition for
employment would necessarily be so great as to reduce the
wages of labor to what was barely sufficient to keep up
the number of laborers, and, the country being already
fully peopled, that number could never be augmented." [Smith I, p. 84]
The surplus population would have to die.
So, in a declining state of society, we have the increasing misery of
the worker; in an advancing state, complicated misery; and in the
terminal state, static misery.
Smith tells us that a society of which the greater part suffers is not
happy. [Smith I, p. 70] But, since even the most prosperous state of
society leads to suffering for the majority, and since the economic
system [Nationalokonomie], which is a society based on private
interests, brings about such a state of prosperity, it follows that
society's distress is the goal of the economic system.
We should further note in connection with the relationship between
worker and capitalist that the latter is more than compensated for wage
rises by a reduction in the amount of labor time, and that wage rises
and increases in the interest on capital act on commodity prices like
simple and compound interest respectively.
Let us now look at things from the point of view of the political
economist and compare what he has to say about the theoretical and
practical claims of the worker.
He tells us that, originally, and in theory, the whole produce of labor
belongs to the worker. [Smith I, p. 57] But, at the same time, he tells
us that what the worker actually receives is the smallest part of the
product, the absolute minimum necessary; just enough for him to exist
not as a human being but as a worker and for him to propagate not
humanity but the slave class of the workers.
The political economist tells us that everything is bought with labor
and that capital is nothing but accumulated labor, but then goes on to
say that the worker, far from being in a position to buy everything,
must sell himself and his humanity.
While the ground rent of the indolent landowner generally amounts to a
third of the product of the soil, and the profit of the busy capitalist
to as much as twice the rate of interest, the surplus which the worker
earns amounts at best to the equivalent of death through starvation for
two of his four children. [Smith I, p. 60]]
According to the political economist, labor is the only means whereby
man can enhance the value of natural products, and labor is the active
property of man. But, according to this same political economy, the
landowner and the capitalist, who as such are merely privileged and
idle gods, are everywhere superior to the worker and dictate the law to
him.
According to the political economist, labor is the only constant price
of things. But nothing is more subject to chance than the price of
labor, nothing exposed to greater fluctuations.
While the division of labor increases to the productive power of labor
and the wealth and refinement of society, it impoverishes the worker
and reduces him to a machine. While labor gives rise to the
accumulation of capital, and so brings about the growing prosperity of
society, it makes the worker increasingly dependent on the capitalist,
exposes him to greater competition and drives him into the frenzied
world of overproduction, with its subsequent slump.
According to the political economist, the interest of the worker is
never opposed to the interest of society. But, society is invariably
and inevitably opposed to the interest of the worker.
According to the political economist, the interest of the worker is
never opposed to that of society: (1) because the rise in wages is more
than made up for by the reduction in the amount of labor time, with the
other consequences explained above, and (2) because in relation to
society the entire gross product is net product, and only in relation
to the individual does the net product have any significance.
But it follows from the analyses made by the political economists, even
though they themselves are unaware of the fact, that labor itself --
not only under present conditions, but in general, insofar as its goal
is restricted to the increase of wealth --is harmful and
destructive.
*
In theory, ground rent and profit on capital are
deductions made
from wages. But, in reality, wages are a deduction which land and
capital grant the worker, an allowance made from the product of labor
to the worker, to labor.
The worker suffers most when society is in a state of decline. He owes
the particular severity of his distress to his position as a worker,
but the distress as such is a result of the situation of society.
But, when society is in a state of progress, the decline and
impoverishment of the worker is the product of his labor and the wealth
produced by him. This misery, therefore, proceeds from the very
essence of present-day labor.
A society at the peak of prosperity -- an ideal, but one which is
substantially achieved, and which is at least the goal of the economic
system and of civil society -- is
static misery for the
worker.
It goes without saying that political economy regards the proletarian
--
i.e., he who lives without capital and ground rent, from
labor alone, and from one-sided, abstract labor at that -- as nothing
more than a
worker. It can, therefore, advance the thesis that,
like a horse, he must receive enough to enable him to work. It does not
consider him, during the time when he is not working, as a human being.
It leaves this to criminal law, doctors, religion, statistical tables,
politics, and the beadle.
Let us now rise above the level of political economy and examine the
ideas developed above, taken almost word for word from the political
economists, for the answers to these two questions:
(1) What is the meaning, in the development of mankind, of this
reduction of the greater part of mankind to abstract labor?
(2) What mistakes are made by the piecemeal reformers, who
either want to raise wages and thereby improve the situation of the
working class, or -- like Proudhon -- see equality of wages as the goal
of social revolution?
In political economy, labor appears only in the form of wage-earning
activity.
*
"It can be argued that those occupation which demand specific
abilities or longer training have on the whole become more
lucrative; while the commensurate wage for mechanically uniform
activity, in which everyone can be quickly and easily trained, has
fallen, and inevitably so, as a result of growing competition. And
it is precisely this kind of labor which, under the present
system of labor organization, is by far the most common.
"So, if a worker in the first category now earns seven times as
much as he did 50 years ago, while another in the second category
continues to earn the same as he did then, then on average
they earn four times as much.
"But if in a given country there are only a thousand workers in the
first category and a million in the second, then 999,000 are no
better off than 50 years ago, and they are worse off if the
prices of staple goods have risen.
"And yet people are trying to deceive themselves about the most
numerous class of the population with superficial average
calculations of this sort.
"Moreover, the size of wages is only one factor in evaluating a
worker's income: it is also essential to take into account the
length of time for which such wages are guaranteed, and there is no
question of guarantees in the anarchy of so-called free competition
with its continual fluctuations and stagnation. Finally, we must
bear in mind the hours of work which were usual earlier and those
which are usual now. And for the English cotton workers, the
working day has been increased, as a result of the employers'
greed, from 12 to 16 hours during the past 25 years or so -- i.e.,
since labor-saving machines were introduced. This increase in one
country and in one branch of industry inevitably carried over to a
greater or lesser degree into other areas, for the rights of the
wealthy to subject the poor to boundless exploitation are still
universally acknowledged."
[ Wilhelm Schulz, Die Bewegung der Produktion,
eine geschichtlichstatistiscke Abhandlung.
Zurich and Winterthur, 1843, p. 65 ]
"But even even this were as true as it is false, that the average
income of all classes of society has grown, the differences and
relative intervals between incomes can still have grown bigger, so
that the contrast between wealth and poverty becomes sharper. For
it is precisely because total production rises that needs,
desires, and claims also increase, and they increase in the same
measure as production rises; relative poverty can therefore grow
while absolute poverty diminishes. The Samoyed is not poor with
his blubber and rancid fish, for in his self-contained society,
everyone has the same needs. But, in a state which is making rapid
headway, which, in the course of a decade, increases its total
production in relation to the population by a third, the worker who
earns the same at the end of the 10 years as he did at the
beginning has not maintained his standard of living, he has grown
poorer by a third."
[ Wilhelm Schulz, pp. 65-6 ]
But political economy knows the worker only as a beast of burden, as an
animal reduced to the minimum bodily needs.
"If a people is to increase its spiritual freedom, it can no longer
remain in thrall to its bodily needs, it can no longer be the
servant of the flesh. Above all, it needs time for intellectual
exercise and recreation. This time is won through new developments
in the organization of labor.
"Nowadays, a single worker in the cotton mills, as a result of new
ways of producing power and new machinery, can often do work that
previously needed 100 or even 250-300 workers. All branches of
industry have witnessed similar consequences, since external
natural forces are increasingly being brought to bear on human
labor. If the amount of time and human energy needed earlier to
satisfy a given quantity of material needs was later reduced by
half, then, without any forfeiture of material comfort, the margin
for intellectual creation and recreation will have increased by
half.
"But, even the sharing of the spoils which we win from old Chronos
on his very own territory still depends on blind and unjust chance.
"In France, it has been estimated that, at the present stage of
production, an average working day of five hours from each person
capable of work would be sufficient to satisfy all society's
material needs.... In spite of the time saved through improvements
in machinery, the time spent in slave labor in the factories has
increased for many people."
[ Wilhelm Schulz, pp. 67-8 ]
"The transition from complicated handicrafts presupposes a breaking
down of such work into the simple operations of which it consists.
To begin with, however, only a part of the uniformly recurring
operations falls to the machines, while another part falls to men.
Permanently uniform activity of this kind is by its very nature
harmful to both soul and body -- a fact which is also confirmed by
experience; and so, when machinery is combined in this way, with
the mere division of labor among a larger number of men, all the
shortcomings of the latter inevitably make their appearance. These
shortcomings include the greater mortality of factory workers....
"No attention has been paid to the essential distinction between
how far men work through machines and how far they work
as machines."
[ Wilhelm Schulz, pp. 69 ]
"In the future life of the nations, however, the mindless forces of
nature operating in machines will be our slaves and servants."
[ Wilhelm Schulz, pp. 74 ]
"In the English spinning mills, only 158,818 men are employed,
compared with 196,818 women. For every 100 men workers in the
Lancashire cotton mills, there are 103 women workers' in Scotland,
the figure is as high as 209. In the English flax mills in Leeds,
there are 147 women for every 100 men workers; in Dundee, and on
the east coast of Scotland, this figure is as high as 280. In the
English silk-factories, there are many women workers; in the wool
factories, where greater strength is needed, there are more men.
As for the North American cotton mills, in 1833 there were no fewer
than 38,927 women alongside 18,593 men.
"So, as a result of changes in the organization of labor, a wider
area of employment opportunities has been opened up to members of
the female sex... more economic independence for women... both
sexes brought closer together in their social relations."
[ Wilhelm Schulz, pp. 71-2 ]
"Employed in the English spinning mills operated by steam and water
in the year 1835 were: 20,558 children between 8 and 12 years of
age; 35,867 between 12 and 13; and, finally, 108,208 between 13 and
18....
"True, the advances in mechanization, which remove more and more of
the monotonous tasks from human hands, are gradually eliminating
these ills. But, standing in the way of these more rapid advances
is the fact that the capitalists are in a position to make use of
the energies of the lower classes, right down to children, very
easily and very cheaply, and to use them instead of machinery."
[ Wilhelm Schulz, pp. 70-1 ]
"Lord Brougham's appeal to the workers: 'Become capitalists!'...
"The evil that million are only able to eke out a living through
exhausting, physically destructive, and morally and intellectually
crippling, labor; that they are even forced to regard the
misfortune of finding such work as fortunate."
[ Wilhelm Schulz, pp. 60 ]
"So, in order to live, the non-owners are forced to place
themselves directly or indirectly at the service of owners --
i.e., become dependent upon them."
[ C. Pecqueur, Theorie nouvelle d'economie sociale
et politique, ou etudes sur l'organisation des societes,
Paris, 1842, p. 409 ]
"Servants -- pay; workers -- wages; clerks -- salaries or
emoluments....
"hire out one's labor", "lend out one's labor at interest", "work
in another's place".
"hire out the materials of labor", "lend the materials of labor at
interest", "make another work in one's place".
[ C. Pecqueur, p. 409-10, 411 ]
"This economic constitution condemns men to such abject
employments, such desolate and bitter degradation, that by
comparison savagery appears like a royal condition." "Prostitution
of the non-owning class in all its forms." Rag-and-bone men.
[ C. Pecqueur, p. 417-18, 421 ]
Charles Loudon, in his work
Solution du probleme de la population, gives the number of prostitutes in England as
60-70,000. The number of women of "doubtful virtue" is roughly the
same.
"The average life span of these unfortunate creatures on the
streets, after they have embarked on their career of vice, is about
six or seven years. This means that, if the number of 60-70,000
prostitutes is to be maintained, there must be in the three kingdoms
at least 8-9,000 women a year who take up this infamous trade --
i.e., roughly 24 victims a day, which is an average of one an hour.
So, if the same proportion is true for the whole surface of the
planet, then at all times there must be one-and-a-half million of
these unhappy creatures."
[ Charles Loudon, Solution du probleme de la population
et de la subsistence, soumise a un medecin
dans une serie du lettres, Paris, 1842, p. 229 ]
"The population of the poor grows with their poverty, and it is at
the most extreme limit of need that human beings crowd together in
the greatest numbers in order to fight among themselves for the
right to suffer....
"In 1821, the population of Ireland was 6,801,827. By 1831, it had
risen to 7,764,010; that is, a 14 per cent increase in 10 years.
In Leinster, the most prosperous of the provinces, the population
only grew by 8 per cent, while in Connaught, the poorest of the
provinces, the increase was as high as 21 per cent. (Extract from Inquiries Published in England on Ireland, Vienna, 1840.)
[ Eugene Buret, De la misere des classes laborieuses
en Angleterre et en France,
2 vols., Paris, 1840, Vol. I, pp. 36-7 ]
Political economy regards labor abstractly, as a thing; labor is a
commodity; if the price is high, the commodity is much in demand; if it
is low, then it is much in supply; "the price of labor as a commodity
must fall lower and lower". [ ibid., p. 43 ] This is brought about
partly by the competition among the workers themselves.
"... the working population, seller of labor, is forced to accept
the smallest part of the product... Is the theory of labor as a
commodity anything other than a disguised theory of slavery?"
"Why then was labor regarded as nothing more than an exchange
value?"
[ Eugene Buret, p. 43 ]
The big workshops prefer to buy the labor of women and children, because
it costs less than that of men.
"Vis-a-vis his employer, the worker is not at all in the position
of a free seller.... The capitalist is always free to employ
labor, and the worker is always forced to sell it. The value of
labor is completely destroyed if it is not sold at every instant.
Unlike genuine commodities, labor can be neither accumulated nor
saved.
"Labor is life, and if life is not exchanged every day for food, it
suffers and soon perishes. If human life is to be regarded as a
commodity, we are forced to admit slavery."
[ Eugene Buret, p. 49-50 ]
So, if labor is a commodity, it is a commodity with the most
unfortunate characteristics. But, even according to economic
principles, it is not one, for it is not the "free product of a free
market". [ ibid., p. 50 ] The present economic regime "reduces at the
same time both the price and the remuneration of labor; it perfects the
worker and degrades the man." [ ibid., p. 52-3 ] "Industry has become a
war, commerce a game." [ ibid., p. 62 ]
"The machines for spinning cotton (in England) alone represent
84,000,000 handworkers."
[ Eugene Buret, p. 193 ]
Up to now, industry has been in the situation of a war of conquest:
"it has squandered the lives of the men who composed its army with
as much indifference as the great conquerors. Its goal was the
possession of riches, and not human happiness." "These interests
(i.e., economic interests), left to their own free development,
... cannot help coming into conflict; war is their only arbiter,
and the decisions of war assign defeat and death to some and
victory to others.... It is in the conflict of opposing forces
that science looks for order and equilibrium; perpetual was, in
the view of science, is the only means of achieving peace; this war
is called competition."
[ Eugene Buret, pp. 20,23 ]
"The industrial war, if it is to be waged successfully, needs large
armies which it can concentrate at one point and decimate at will.
And neither devotion nor duty moves the soldiers of this army to
bear the burden placed upon them; what moves them is the need to
escape the harshness of starvation. They feel neither affection
nor gratitude for their bosses, who are not bound in their
subordinates by any feeling of goodwill and who regard them not as
human beings but as instruments of production which bring in as
much and cost as little as possible. These groups of workers, who
are more and more crowded together, cannot even be sure they they
will always be employed; the industry which has summoned them
together allows them to live only because it needs them; as soon as
it can get rid of them, it abandons them without the slightest
hesitation; and the workers are forced to offer their persons and
their labor for whatever is the going price. The longer, more
distressing and loathsome the work which is given them, the less
they are paid; one can see workers who toil their way non-stop
through a 16-hour day and who scarcely manage to buy the right not
to die."
[ Eugene Buret, pp. 68-9 ]
"We are convinced... as are the commissioners appointed to look
into the conditions of the handloom weavers, that the large
industrial towns would quickly lose their population of workers if
they did not all the time receive a continual stream of healthy
people and fresh blood from the surrounding country areas."
[ Eugene Buret, pp. 362 ]
PROFIT OF CAPITAL
1. Capital
(1) What is the basis of capital -- i.e., of private
property in the products of another's labor?
"Even if capital cannot be reduced to simple theft or fraud, it
still needs the assistance of legislation to sanctify inheritance."
[ Jean-Baptiste Say, Traie d'economie politique,
third edition, 2 volumes, Paris, 1817, I, p. 136, footnote ]
How does one become an owner of productive stock? How does on become
owner of the products created by means of this stock?
Through positive law. [Say, II, p. 4]
What does one acquire with capital, with the inheritance of a large
fortune, for example?
"The person who acquires, or succeeds to a great fortune, does not
necessarily acquire or succeed to any political power.... The power
which that possession immediately and directly conveys to him, is
the power of purchasing; a certain command over all the labor, or
over all the produce of labor, which is then in the market."
[ Smith, Wealth of Nations, I, pp. 26-7 ]
Capital is, therefore, the power to command labor, and its products.
The capitalist possesses this power not on account of his personal or
human properties but insofar as he is an owner of capital. His power is
the purchasing power of his capital, which nothing can withstand.
Later, we shall see how the capitalist, by means of capital, exercises
his power to command labor; but we shall then go on to see how capital,
in its turn, is able to rule the capitalist himself.
What is capital?
"A certain quantity of labor stocked and stored up. .."
[ Smith, p. 295 ]
Capital is stored up-labor.
(2) Bonds, or stock, is any accumulation of the products of the
soil or of manufacture. Stock is only called capital when it yields its
owner a revenue or profit.
2. The Profit of Capital
The profit or gain of capital is altogether different from the wages of
labor. This difference manifests itself in two ways: firstly, the
profits of capital are regulated altogether by the value of the stock
employed, although the labor of inspection and direction for different
capitals may be the same. Furthermore, in many large factories, the
whole labor of this kind is committed to some principal clerk, whose
wages never bear any regular proportion to the capital of which he
oversees the management. And the owner of this capital, though he is
thus discharged of almost all labor, still expects that his profits
should bear a regular proportion to his capital. [Smith, p. 43]
Why does the capitalist demand this proportion between profit and
capital?
He could have no interest in employing these workers, unless he
expected from the sale of their work something more than was sufficient
to replace the stock advanced by him as wages; and he could have no
interest to employ a great stock rather than a small one, unless his
profits were to bear some proportion to the extent of his stock.
[Smith, p. 42]
So the capitalist makes a profit first on the ages and secondly on the
raw materials advanced by him.
What relation, then, does profit have to capital?
It is not easy to ascertain what are the average wages of labor even in
a particular place and at a particular time, and it is even more
difficult to determine the profit on capital. Variations of price in
commodities which the capitalist deals in, the good or bad fortune both
of his rivals and of his customers, a thousand other accidents to which
his goods are liable in transit and in warehouses, all produce a daily,
almost hourly, variation in profits. [Smith, pp. 78-9] But although it
may be impossible to determine, with any degree of precision, the
average profits of capital, some notion may be formed of them from the
interest of money. Wherever a great deal can be made by the use
of money, a great deal will be given for the use of it; wherever little
can be made, little will be given. [Smith, p. 79]
"The proportion which the usual market rate of interest ought to
bear to the ordinary rate of clear profit, necessarily varies as
profit rises or falls. Double interest is in Great Britain
reckoned what the merchants call a good, moderate, reasonable
profit, terms which... mean no more than a common and usual
profit."
[ Smith, p. 87 ]
What is the lowest rate of profit? And what is the
highest?
The lowest rate of ordinary profit on capitals must always be something
more than what is sufficient to compensate the occassional losses to
which every employment of capital is exposed. It is this surplus value
only which is the neat or clear profit. The same holds for the lowest
rate of interest. [Smith, p. 86]
The highest rate to which ordinary profits can rise may be such as, in
the price of the greater part of commodities, easts up the whole of the
rent of the land and reduces the wages of labor expended in preparing
the commodity and bringing it to market to the lowest rate, the bare
subsistence of the laborer. The workman must always have been fed in
some way or other while he was about the work; but the rent of land can
disappear entirely. Examples: the servants of the East India Company in
Bengal. [Smith, pp. 86-7]
Besides all the advantages of limited competition which the capitalist
can exploit in such a case, he can keep the market price above the
natural price, by quite honorable means.
Firstly, by secrets in trade, where the market is at a great
distance from the residence of those who supply it; that is, by
concealing a change in price, an increase above the natural level. The
effect of this concealment is that other capitalists do not invest
their capital in this branch of industry.
Secondly, by secrets in manufacture, which enable the capitalist
to cut production costs and sell his goods at the same price, or even
at a lower price than his competitors, while making a bigger profit.
(Deceit by concealment is not immoral? Dealings on the Stock Exchange.)
Furthermore, where production is confined to a particular locality (as
in the case of select wines) and the effective demand can never be
satisfied. Finally, through monopolies granted to individuals or
companies. The price of monopoly is the highest which can be got.
[Smith, pp. 53-4]
Other chance causes which can raise the profit on capital:
The acquisition of new territory, or of new branches of trade, may
sometimes rise the profits of stock even in a wealthy country, because
part of the capital is withdrawn from the old branches of trade,
competition comes to be less than before, and the market is less fully
supplies with commodities, the prices of which then rise: those who
deal in these commodities can then afford to borrow at a higher
interest. [Smith, p. 83]
As any particular commodity comes to be more manufactured, that part of
the price which resolves itself into wages and profit comes to be
greater in proportion to that which resolves itself into rent. In the
progress of the manufacture of commodity, not only the number of the
profits increase, but every subsequent profit is greater than the
preceding one; because the capital from which it is derived must always
be greater. The capital which employs the weavers, for example, must be
greater than that which employs the spinners; because it not only
replaces that capital with its profits, but pays besides, the wages of
the weavers; and the profits must always bear some proportion to the
capital. [Smith, p. 45]
So, the growing role played by human labor in fashioning the natural
product increases not the wages of labor but partly the number of
profitable capitals and partly the size of each capital in proportion
to those that precede it.
More later about the profit which the capitalist derives from the
division of labor.
He profits in two ways: firstly, from the division of labor and
secondly, and more generally, from the growing role played by human
labor in fashioning the natural product. The larger the human share in
a commodity, the larger the profit of dead capital.
In one and the same society, the average rates of profit on capital are
more nearly upon a level than are the wages of different kinds of
labor. [Smith, p. 45] In the different employments of capital, the
ordinary rate of profit varies more or less with the certainty or
uncertainty of the returns;
"... the ordinary profit of stock, though it rises with the risk,
does not always seem to rise in proportion to it."
[ Smith, pp. 99-100 ]
Needlesstosay, profits also rise if the means of circulation (e.g.,
paper money) improve or become less expensive.
3. The Rule of Capital over Labor
and the Motives of the Capitalist
"The consideration of his own private profit is the sole motive
which determines the owner of any capital to employ it either in
agriculture, in manufactures, or in some particular branch of the
wholesale or retail trade. The different quantities of productive
labor which may put it into motion, and the different values which
it may add to the annual produce of the land and labor of the
society, according as it is employed in one or other of those
different ways, never enter into his thoughts."
[ Smith, p. 355 ]
"The most useful employment of capital for the capitalist is that
which, with the same degree of security, yields him the largest
profit; but this employment is not always the most useful for
society... the most useful is that which... stimulates the
productive power of its land and labor."
[ Say, II, pp. 130-31 ]
"The plans and projects of the employers of stock regulate and
direct all the most important operations of labor, and profit is
the end proposed by all those plans and projects. But the rate of
profit does not, like rent and wages, rise with the prosperity and
fall with the declension of the society. On the contrary, it is
naturally low in rich and high in poor countries, and it is always
highest in countries which are going fastest to ruin. The interest
of this third order [those who live by profit], therefore, has not
the same connection with the general interest of the society as
that of the other two.... The interest of the dealer, however, in
any particular branch of trade or manufactures, is always in some
respects different from, and even opposite to, that of the public.
To widen the market and to narrow the competition, is always the
interest of the dealers... and order of men whose interest is
never exactly the same as that of the public, who have generally an
interest to decisive and even to oppress the public..."
[ Smith I, pp. 231-2 ]
4. The Accumulation of Capitals
and the Competition among the Capitalists
The increase of capitals, which raises wages, tends to lower profits,
as a result of the competition among capitalists. [Smith, p. 78]
If, for example, the capital which is necessary for the grocery trade
of a particular town
"is divided between two different grocers, their competition will
tend to make both of them sell cheaper than if it were in the hands
of one only; and if it were divided among 20, their competition
would be just so much the greater, and the chance of their
combining together, in order to raise the price, just so much the
less."
[ Smith I, p. 322 ]
Since we already know that monopoly prices are as high as possible,
since the interest of the capitalists, even from a straight-forwardly
economic point of view, is opposed to the interest of society, and
since the growth of profits acts on the price of the commodity like
compound interest [Smith, pp. 87-8], it follows that the sole defense
against the capitalists is competition, which in the view of
political economy has the beneficial effect both of raising wages and
cheapening commodities to the advantage of the consuming public.
But, competition is possible only if capitals multiply and are held by
many different people. It is only possible to generate a large number
of capitals as a result of multilateral accumulation, since capital in
general stems from accumulation. But, multilateral accumulation
inevitably turns into unilateral accumulation. Competition among
capitalists increases accumulation of capitals. Accumulation -- which,
under the rule of private property, means concentration of capital in
few hands -- inevitably ensues if capitals are allowed to follow their
own natural course. It is only through competition that this natural
proclivity of capital begins to take shape.
We have already seen that the profit on capital is in proportion to its
size. If we ignore deliberate competition for the moment, a large
capital accumulates more rapidly, in proportion to its size, than does
a small capital.
This means that, quite apart from competition, the accumulation of
large capital takes place at a much faster rate than that of small
capital. But, let us follow this process further.
As capitals multiply, the profits on capital diminish, as a result of
competition. So, the first to suffer is the small capitalist.
"In a country which had acquired its full complement of riches,
... as the ordinary rate of clear profit would be very small, so
the usual market rate of interest which could be afforded out of it
would be so low as to render it impossible for any but the very
wealthiest of people to live upon the interest of their money. All
people of small or middling fortunes would be obliged to
super-intend themselves the employment of their own stocks. It
would be necessary that almost every man should be a man of
business, or engage in some sort of trade."
[ Smith I, p. 86 ]
This is the situation most dear to the heart of political economy.
"The proportion between capital and revenue, therefore, seems
everywhere to regulate the proportion between industry and
idleness. Wherever capital predominates, industry prevails:
wherever revenue, idleness."
[ Smith, p. 301 ]
But, what about the employment of capital in this increased
competition?
"As the quantity of stock to be lent at interest increases, the
interest, or the price which must be paid for the use of that
stock, necessarily diminishes, not only from those general causes,
which make the market price of things commonly diminish as their
quantity increases, but from other causes which are peculiar to
this particular case.
"As capitals increase in any country, the profits which can be made
by employing them necessarily diminish. It becomes gradually more
and more difficult to find within the country a profitable method
of employing any new capital. There arises, in consequence, a
competition between different capitals, the owner of one
endeavoring to get possession of that employment which is occupied
by another.
"But, on most occassions he can hope to jostle that other out of
this employment by no other means but by dealing upon more
reasonable terms. He must not only sell what he deals in somewhat
cheaper, but, in order to get it to sell, he must sometimes, too,
buy it dearer.
"The demand for productive labor, by the increase of the funds
which are destined for maintaining it, grows every day greater and
greater. Laborers easily find employment, but the owners of
capitals find it difficult to get laborers to employ. Their
competition raises the wages of labor and sinks the profits of
stock."
[ Smith p. 316 ]
The small capitalist, therefore, has two choices: he can either consume
his capital, since he can no longer live on the interest --
i.e., cease to be a capitalist; or, he can himself set up a
business, sell his goods at a lower price, and buy them at a dearer
price than the richer capitalist, and pay higher wages, which means
that he would go bankrupt -- since the market price is already very low
as a result of the intense competition we presupposed. If, on the other
hand, the big capitalist wants to squeeze out the smaller one, he has
all the same advantages over him as the capitalist has over the worker.
He is compensated for the smaller profits by the larger size of his
capital, and he can even put up with short-term losses until the
smaller capitalist is ruined and he is freed of this competition. In
this way, he accumulates the profits of the small capitalist.
Furthermore: the big capitalist always buys more cheaply than the small
capitalist, because he buys in larger quantities. He can, therefore,
afford to sell at a lower price.
But, if a fall in the rate of interest turns the middle capitalists
from rentiers into businessmen, conversely the increase in business
capitals and the resulting lower rate of profit produce a fall in the
rate of interest.
"But, when the profits which can be made by use of a capital are
diminished... the price which can be paid for the use of it...
must necessarily be diminished with them."
[ Smith p. 316 ]
"As riches, improvement, and population, have increased, interest
has declined", and consequently the profits of stock; "...after
these are diminished, stock may not only continue to increase, but
to increase much faster than before.... A great stock, though with
small profits, generally increases faster than a small stock with
great profits. Money, says the proverb, makes money."
[ Smith p. 83 ]
So, if this large capital is opposed by small capitals with small
profits, as in the case under the conditions of intense competition
which we have presupposed, it crushes them completely.
The inevitable consequence of this competition is the deterioration in
the quality of goods, adulteration, spurious production, and universal
pollution to be found in large towns.
Another important factor in the competition between big and small
capitals is the relationship between fixed capital and circulating
capital.
Circulating capital is capital
"employed in raising, manufacturing, or purchasing goods, and
selling them again at a profit. The capital employed in this
manner yields no revenue or profit to its employer, while it either
remains in his possession or continues in the same shape.... His
capital is continually going from him in one shape, and returning
to him in another, and it is only by means of such circulation, or
successive exchanges, that is can yield him any profit...."
Fixed capital is capital
"employed in the improvement of land, in the purchase of useful
machines and instruments, or in such like things....
"...every saving in the expense of supporting the fixed capital of
the undertaker of every work is necessarily divided between his
fixed and his circulating capital. While his whole capital remains
the same, the smaller the one part, the greater must necessarily be
the other. It is the circulating capital which furnishes the
materials and wages of labor, and puts industry into motion. Every
saving, therefore, in the expense of maintaining the fixed capital,
which does not diminish the productive powers of labor, must
increase the fund which puts industry into motion...."
[ Smith, p. 257 ]
It is immediately clear that the relation between fixed capital and
circulating capital is much more favorable to the big capitalist than
it is to the smaller capitalist. The difference in volume between the
amount of fixed capital needed by a very big banker and the amount
needed by a very small one is insignificant. The only fixed capital
they need is an office. The equipment needed by a big landowner does
not increase in proportion to the extent of his land. Similarly, the
amount of credit available to a big capitalist, compared with a smaller
one, represents a bigger saving in fixed capital -- namely, in the
amount of money which he must have available at all times. Finally, it
goes without saying that where industrial labor is highly developed --
i.e., where almost all manual crafts have become factory labor
-- the entire capital of the small capitalist is not enough to procure
for him even the necessary fixed capital. It is well known that
large-scale [agricultural] cultivation generally requires only a small
number of hands.
The accumulation of large capitals is generally accompanied by a
concentration and simplification of fixed capital, as compared with the
smaller capitalists. The big capitalist establishes for himself some
kind of organization of the instruments of labor.
"Similarly, in the sphere of industry every factory and every
workshop is a more comprehensive combination of a larger material
property with numerous and varied intellectual abilities and
technical skills which have as their shared aim the development
of production.... Where legislation preserves the unity of large
landed properties, the surplus quantity of a growing population
crowds together into industry, and it is therefore mainly in
industry that the proletariat gathers in large numbers, as in Great
Britain. But, where legislation allows the continuous division of
the land, as in France, the number of small, debt-ridden
proprietors increases and many of them are forced into the class of
the needy and the discontented. Should this division and
indebtedness go far enough, in the same way as big industry
destroys small industry; and since larger landholding complexes
once more come into being, many propertyless workers no longer
needed on the land are, in this case too, forced into industry."
[ Schulz, pp. 58-9 ]
"The character of commodities of the same sort changes as a result
of changes in the nature of production, and in particular as a
result of mechanization. Only by eliminating human labor has it
become possible to spin from a pound of cotton worth 3s. 8d., 350
hanks worth 25 guineas and 167 miles in length."
[ Schulz, p. 62 ]
"On average, the prices of cotton goods have fallen by 11/12ths
over the past 45 years, and according to Marshall's calculations a
quantity of manufacture costing 16s. in 1814 now cost 1s. 10d. The
drop in prices of industrial products has meant both a rise in home
consumption and an increase in the foreign market; as a result, the
number of cotton workers in Great Britain not only did not fall
after the introduction of machinery, but rose from 40,000 to 1.5
million. As for the earnings of industrial employers and workers,
the growing competition among factory owners has inevitably
resulted in a drop in profits in proportion to the quantity of
products. Between 1820 and 1833, the gross profit made by
Manchester manufacturers on a piece of calico fell from 4s. 1.5d.
to 1s. 9d. But, to make up for this loss, the rate of production
has been correspondingly increased. The consequence is that there
have been instances of overproduction in some branches of industry;
that there are frequent bankruptcies, which create fluctuations of
property within the class of capitalists and masters of labor,
and force a number of those who have been ruined economically into
the ranks of the proletariat; and that frequent and sudden
restriction in employment among the class of wage-earners."
[ Schulz, p. 63 ]
"To hire out one's labor is to begin one's enslavement; to hire out
the materials of labor is to achieve one's freedom.... Labor is
man, while matter contains nothing human."
[ Pecqueur, pp. 411-12 ]
"The element of matter, which can do nothing to create wealth
without the element of labor, acquires the magical property of
being fruitful for them [that is, for the property owners], as if
they themselves had provided this indispensable element."
[ Pecqueur, p. 412 ]
"If we assume that a worker can earn an average of 400 francs a
year from his daily labor, and that this sum is sufficient for one
adult to eke out a living, then anyone who receives 2,000 francs in
interest or rent is indirectly forcing 5 men to work for him; an
income of 100,000 francs represents the labor of 250 men; and
1,000,000 francs the labor of 2,500 (300 million -- Louis Philippe
-- therefore represents the labor of 750,000 workers)."
[ Pecqueur, pp. 412-13 ]
"The property owners have received from human law the right to use
and abuse the materials of all labor -- i.e., to do as they wish
with them.... There is no law which obliges them punctually and at
all time to provide work for those who do not own property or to
pay them a wage which is at all times adequate, etc."
[ Pecqueur, p. 413 ]
"Complete freedom as to the nature, the quantity, the quality, and
the appropriateness of production, the use and consumption of
wealth and the disposal of the materials of all labor. Everyone is
free to exchange his possessions as he chooses, without any other
consideration than his own interest as an individual."
[ Pecqueur, p. 413 ]
"Competition is simply an expression of free exchange, which is
itself the immediate and logical consequence of the right of any
individual to use and abuse all instruments of production. These
three economic moments, which are in reality only one -- the right
to use and abuse, freedom of exchange and unrestricted competition
-- have the following consequences: each produces what he wants,
how he wants, when he wants, where he wants; he produces well or he
produces badly, too much or not enough, too late or too early, too
dear or too cheap; no one knows whether he will sell, to whom he
will sell, how he will sell, when he will sell, where he will sell;
the same goes for buying. The producer is acquainted with neither
the needs nor the resources, neither the demand nor the supply. He
sells when he wants, then he can, where he wants, to whom he wants
and at the price he wants. The same goes for buying. In all this
he is at all times the plaything of chance, the slave of the law of
the strongest, of the least pressed, of the richest.... While at
one point there is a shortage of wealth, at another there is a
surfeit and squandering of the same. While one producer sells a
great deal, or at high prices and with an enormous profit, another
sells nothing or sells at a loss.... Supply is ignorant of demand,
and demand is ignorant of supply. You produce on the basis of a
preference or a fashion prevalent among the consuming public; but
by the time you are preparing to put your commodity on the market,
the mood has passed and some other kind of product has come into
fashion.... The inevitable consequences are continual and
spreading bankruptcies, miscalculations, sudden collapses, and
unexpected fortunes; trade crises, unemployment, periodic surfeits
and shortages; instability and decline of wages and profits; the
loss or enormous waste of wealth, of time, and of effort in the
arena of fierce competition."
[ Pecqueur, p. 414-16 ]
Ricardo in his book [On the Principles of Political Economy et al]
(rent of land): Nations are merely workshops for production, and man is
a machine for consuming and producing. Human life is a piece of
capital. Economic laws rule the world blindly. For Ricardo, men are
nothing, the product everything. In Chapter 26, of the French
translation, we read:
"To an individual with a capital of 20,000 pounds, whose profits
were 2,000 per annum, it would be a matter quite indifferent
whether his capital would employ a hundred or a thousand men... is
not the real interest of the nation similar? Provided its net real
income, its rents and profits, be the same, it is of no importance
whether the nation consists of 10 or 12 million inhabitants."
[ Ricardo, pp. 234-5 ]
"In truth," says M. de Sismondi, "it remains only to desire that
the king, who has been left quite alone on the island, should, by
continuously cranking up a number of automatons, get all England's
work done."
[ J. C. L. Simonde de Sismondi, Nouveaux principes
d'economic politique, 2 volumes, Paris, 1819, II, p. 331 ]
"The master who buys a worker's labor at a price so low that it is
barely enough to meet his most pressing needs is responsible
neither for the low wages nor the long hours of work: he himself
is subject to the law which he imposes.... Misery is the product
not so much of men as of the power of things."
[ Buret, I, p. 82 ]
"The inhabitants of many different parts of Great Britain have not
capital sufficient to improve and cultivate all their lands. The
wool of the southern counties of Scotland is, a great part of it,
after a long land carriage through very bad roads, manufactured in
Yorkshire, for want of capital to manufacture it at home. There
are many little manufacturing towns in Great Britain, of which the
inhabitants have not capital sufficient to transport the produce of
their own industry to those distant markets where there is demand
and consumption for it. If there are any merchants among them,
they are properly only the agents of wealthier merchants who reside
in some of the greater commercial cities."
[ Smith, I, pp. 326-7 ]
"The annual produce of the land and labor of any nation can be
increased in its value by no other means but by increasing either
the number of its productive laborers, or the productive powers of those laborers who had before been employed.... In either
case, an additional capital is almost always required."
[ Smith, I, pp. 306-7 ]
"As the accumulation of stock must, in the nature of things,
previous to the division of labor, so labor can be more and more
subdivided in proportion only as stock is previously more and more
accumulated. The quantity of materials which the same number of
people can work up, increases in a great proportion as labor comes
to be more and more subdivided; and as the operations of each
workman are gradually reduced to a greater degree of simplicity, a
variety of new machines come to be invented for facilitating and
abridging these operations. As the division of labor advances,
therefore, in order to give constant employment to an equal number
of workmen, an equal stock of provisions, and a greater stock of
materials and tools than what would have been necessary in a ruder
state of things, must be accumulated beforehand. But the number of
workmen in every branch of business generally increases with the
division of labor in that branch, or rather it is the increase of
their number which enables them to class and subdivide themselves
in this manner."
[ Smith, I, pp. 241-2 ]
"As the accumulation of stock is previously necessary for carrying
on this great improvement in the productive powers of labor, so
that accumulation naturally leads to this improvement. The person
who employs his stock in maintaining labor, necessarily wishes to
employ it in such a manner as to produce as great a quantity of
work as possible. He endeavors, therefore, both to make among his
workmen the most proper distribution of employment, and to furnish
them with the best machines which he can either invent or afford to
purchase. His abilities in both these respects are generally in
proportion to the extent of his stock, or to the number of people
it can employ. The quantity of industry, therefore, not only
increases in every country with the increase of the stock which
employs it, but, in consequence of that increase, the same quantity
of industry produces a much greater quantity of work."
[ Smith, I, p. 242 ]
Hence overproduction.
"More extensive combinations of productive forces... in trade and
industry through the unification of more numerous and more varied
human and natural forces for undertakings on a larger scale. Also,
there are already a number of cases of closer links among the main
branches of production themselves. Thus, large manufacturers will
try to acquire large estates in order to avoid depending on others
for at least a part of the raw materials they need for their
industry; or they will set up a trading concern linked to their
industrial enterprises and not only sell their own products but buy
up and retail other sorts of goods to their workers. In England,
where there are some factory owners who employ between 10- and
12,000 workers... similar combinations of different branches of
production under the control of one man, small states or
provinces within a state, are not uncommon. For example, the
mine-owners near Birmingham recently took over the entire process
of iron production, which was previously in the hands of several
different entrepreneurs and owners. See 'Der bergannische Distrikt
bei Birmingham', Deutsche Vierteljahrsschrift, no.3, 1838.
Finally, in the larger joint-stock companies, which have become so
numerous, we find extensive combinations of the financial resources
of many shareholders with the scientific and technical knowledge
and skills of others to whom the execution of the work is
entrusted. In this way, it is possible for many capitalists to
apply their savings in a more diversified way and even invest them
simultaneously in agricultural, industrial, and commercial
production; as a result, their interests also become more
diversified and the conflict between agricultural, industrial, and
commercial interests begins to fade away. But the greater ease
with which capital can be employed fruitfully in the most varied
fields inevitably increases the conflict between the propertied and
the propertyless classes."
[ Schulz, pp. 241-2 ]
The enormous profit which the landlords make out of misery. The greater
the misery caused by industry, the higher the rent.
It is the same with the rate of interest on the vices of the
proletariat. (Prostitution, drinking, the pawnbroker.)
The accumulation of capitals increases and the competition between them
diminishes, as capital and landed property are united together in one
hand and capital is enabled, because of its size, to combine different
branches of production.
Indifference towards men. Smith's 20 lottery tickets. [Smith, I, p.
94]
Say's net and gross revenue.
RENT OF LAND
The right of the landowners can be traced back to
robbery. [Say, I, p. 136, n.2] Landowners, like all other men, love to
reap where they never sowed, and demand a rent even for the natural
produce of the land. [Smith, I, p. 44]
"The rent of land, it may be thought, is frequently no more than a
reasonable profit or interest for the stock laid out by the
landlord upon its improvement. This, no doubt, may be partly the
case upon some occassions.... The landlord demands a rent even for
unimproved land, and the supposed interest or profit upon the
expense of improvement is generally an addition to this original
rent. Those improvements, besides, are not always made by the
stock of the landlord, but sometimes by that of the tenant. When
the lease comes to be renewed, however, the landlord commonly
demands the same augmentation of rent as if they had been all made
by his own.
"He sometimes demands rents for what is altogether incapable of
human improvements."
[ Smith, I, p. 131 ]
Smith gives as an example of this last case, kelp, a species of seaweed
which, when burnt, yields an alkaline salt useful for making
glass,soap, etc. It grows in several parts of Great Britain, especially
in Scotland, but only upon such rocks as lie within the high water
mark, which are twice every day covered with the sea and of which the
produce, therefore, was never augmented by human industry. The
landlord, however, whose estate is bounded by a kelp shore of this
kind, demands a rent for it as much as for his corn fields. The sea in
the neighborhood of the islands of Shetland is more than commonly
abundant in fish, which make a great part of the subsistence of their
inhabitants. But in order to profit by the produce of the water, they
must have a habitation on the neighboring land. The rent of the
landlord is in proportion, not to what the farmer can make by the land,
but by what he can make both by the land and by the water.
"This rent may be considered as the produce of those power, the use
of which the landlord lends to the farmer. It is greater or
smaller according to the supposed extent of those powers, or in
other words, according to the supposed natural of improved
fertility of the land. It is the work of nature which remains after
deducting or compensation everything which can be regarded as the
work of man."
[ Smith, I, pp. 324-5 ]
"The rent of land, therefore, considered as the price paid for the
use of land, is naturally a monopoly price. It is not at all
proportioned to what the landlord may have laid out upon the
improvement of the land, or to what he can afford to take; but to
what the farmer can afford to give."
[ Smith, I, p. 131 ]
"They [landlords] are the only ones of the three orders whose
revenue costs them neither labor nor care, but comes to them, as it
were, of its own accord, and independent of any plan or project of
their own.
[ Smith, I, p. 230 ]
We have already seen how the volume of rent depends upon the degree of
fertility of the land.
"The rent of land not only varies with its fertility, whatever be
its produce, but with its situation, whatever be its fertility."
[ Smith, I, p. 133 ]
"The produce of lands, mines, and fisheries, when their natural
fertility is equal, is in proportion to the extent and proper
application of the capitals employed about them. When the capitals
are equal and equally well applied, it is in proportion to their
natural fertility."
[ Smith, I, p. 249 ]
These proportions of Smith are important, because they reduce the rent
land, where costs of production and size are equal, to the degree of
fertility of the soil. This clearly demonstrates the perversion of
concepts in political economy, which turns the fertility of the soil
into an attribute of the landlord.
But let us now examine the relation between landlord and tenant.
"In adjusting the terms of the lease, the landlord endeavors to
leave him no greater share of the product than what is sufficient
to keep up the stock from which he furnishes the seed, pays the
labor, and purchases and maintains the cattle and other instruments
of husbandry, together with the ordinary profits of farming stock
in the neighborhood. This is evidently the smallest share with
which the tenant can content himself without being a loser, and the
landlord seldom means to leave him any more. Whatever part of the
produce, or, what is the same thing, whatever part of the price is
over and above this share, he naturally intends to reserve himself
as the rent of his land, which is evidently the highest the tenant
can afford to pay in the actual circumstances of the land.... This
portion... may still be considered as the natural rent of land, or
the rent for which it is actually meant that land should for the
most part be let."
[ Smith, I, p. 130-31 ]
"The landlords," says Say, "operate a certain kind of monopoly
against the tenants. The demands for their commodity, which is
land, is capable of an infinite expansion; but the supply can only
increase up to a certain point.... The agreement reached between
landlord and tenant is always as advantageous as possible to the
former.... Apart from the advantage which he derives from the
nature of the case, he derives a further one from his position, his
larger fortune, his credit and his standing; but the first of these
advantages is in itself enough to enable him at all times to profit
from the favorable circumstances of the land. The opening of a
canal or road and a growth in population and prosperity in a canton
always raise the price of the rent.... What is more, even if the
tenant makes improvement on his plot of land at his own expense, he
can only benefit from this capital for the duration of his lease;
when his lease runs out, this capital remains in the hands of the
landlord. From this moment on, it is the latter who reaps the
interest, even though it was not he who made the original outlay;
for now the rent is raised proportionately."
[ Say, II, pp. 142-3 ]
"Rent, considered as the price paid for the use of land, is
naturally the highest which the tenant can afford to pay in the
actual circumstances of the land."
[ Smith, I, p. 130 ]
"The rent of an estate above ground commonly mounts to what is
supposed to be a third of the gross produce; and it is generally a
rent certain and independent of the occassional variations in the
crop."
[ Smith, I, p. 153 ]
Rent "is seldom less than a fourth, and frequently more than a
third of the whole produce."
[ Smith, I, p. 325 ]
Ground rent cannot be paid in the case of all commodities. For example,
in many districts no rent is paid for stones.
"Such parts only of the produce of land can commonly be brought to
market of which the ordinary price is sufficient to replace the
stock which must be employed in bringing them thither, together
with its ordinary profits. If the ordinary price is more than
this, the surplus part of it will naturally go to the rent of the
land. If it is not more, though the commodity may be brought to
market, it can afford no rent to the landlord. Whether the price
is or is not more depends upon the demand."
[ Smith, I, p. 132 ]
"Rent, it is to be observed, therefore, enters into the composition
of the price of commodities in a different way from wages and
profit. High or low wages and profit are the causes of high or low
prices; high or low rent is the effect of it."
[ Smith, I, p. 132 ]
Among the products which always yield a rent is food.
"As men, like all other animals, naturally multiply in proportion
the means of subsistence, food is always, more or less, in demand.
It can always purchase or command a greater or smaller quantity of
labor, and somebody can always be found who is willing to do
something in order to obtain it. The quantity of labor, indeed,
which it can purchase is not always equal to what it could
maintain, if managed in the most economical manner, on account of
the high wages which are sometimes given to labor. But it can
always purchase such a quantity of labor as it can maintain,
according to the rate at which that sort of labor is commonly
maintained in the neighborhood.
"But land, in almost any situation, produces a greater quantity of
food than what is sufficient to maintain all the labor necessary
for bringing it to market in the most liberal way in which that
labor is ever maintained. The surplus, too, is always more than
sufficient to replace the stock which employed that labor, together
with its profits. Something, therefore, always remains for a rent
to the landlord."
[ Smith, I, p. 132-3 ]
"Food is, in this manner, not only the original source of rent, but
every other part of the produce of land which afterwards affords
rent derives that part of its value from the improvement of the
powers of labor in producing food by means of the improvement and
cultivation of land."
[ Smith, I, p. 150 ]
"Human food seems to be the only produce of land which always and
necessarily affords a rent to the landlord."
[ Smith, I, p. 147 ]
"Countries are populous not in proportion to the number of people
whom their produce can clothe and lodge, but in proportion to that
of those whom it can feed."
[ Smith, I, p. 149 ]
"After food, clothing, and lodging, are the two great wants of
mankind." [Smith, I, p. 147] They generally yield a rent, but not
necessarily.
Let us now sees how the landlord exploits everything which is to the
benefit of society.
(1) The rent of land increases with population.
(2) We have already learnt from Say how ground rent rises with
railways, etc., and with the improvement, security, and multiplication
of the means of communication.
(3) "... every improvement in the circumstances of the society
tends either directly or indirectly to raise the real rent of
land, to increase the real wealth of the landlord, his power
of purchasing the labor, or the produce of the labor of other
people.
"The extension of improvement and cultivation tends to raise
it directly. The landlord's share of the produce necessarily
increases with an increase of the produce.
"That rise in the real price of those parts of the rude
produce of land... the rise in the price of cattle, for
example, tends too to raise the rent of land directly, and in
a still greater proportion. The real value of the landlord's
share, his real command of the labor of other people, not only
rises with the real value of the produce, but the proportion
of his share to the whole produce rises with it. That
produce, after the rise in its real price, requires no more
labor to collect it than before. A smaller proportion of it
will, therefore, be sufficient to replace, with the ordinary
profit, the stock which employs that labor. A greater
proportion of it must, consequently, belong to the landlord."
[ Smith, I, pp. 228-29 ]
The greater the demand for raw products and the consequent rise in
their value may partly be a result of the increase in population and
the growth of their needs. But every new invention and every new
application in manufacture of a raw material which was previously not
used at all or only used rarely, makes for an increase in the ground
rent. For example, the rent of coal-mines rose enormously when
railways, steamships, etc., were introduced.
Besides this advantage which the landlord derives from manufacture,
discoveries, and labor, there is another that we shall see
presently.
(4) "All those improvements in the productive powers of labor,
which tend directly to reduce the real price of manufactures,
tend indirectly to raise the real rent of land. The landlord
exchanges that part of his rude produce, which is over and
above his own consumption, or what comes to the same thing,
the price of that part of it, for manufactured produce.
Whatever reduces the real price of the latter, raises that of
the former. An equal opportunity of the former becomes
thereby equivalent to a greater quantity of the latter; and
the landlord is enabled to purchase a greater quantity of the
conveniences, ornaments, or luxuries, which he has occassion
for."
[ Smith, I, pp. 228-29 ]
But it is foolish to conclude, as Smith does, that since the landlord
exploits everything which is of benefit to society, the interest of the
landlord is always identical with that of society. In the economic
system, under which the rule of private property, the interest which
any individual has in society is in inverse proportion to the interest
which society has in him, just as the interest of the moneylender in
the spendthrift is not at all identical with the interest of the
spendthrift.
We mention only in passing the landlord's obsession with monopoly
against the landed property of foreign countries, which is the reason,
for example, for the corn laws. We shall similarly pass over mediaeval
serfdom, slavery in the colonies and the distress of the rural
population -- the day-laborers -- in Great Britain. Let us confine
ourselves to the propositions of political economy itself.
(1) The landlord's interest in the well-being of society means,
according to the principles of political economy, that he is interested
in the growth of its population and its production and the increase of
its needs, in a word, in the increase of wealth; and the increase of
wealth is, if our previous observations are correct, identical with the
growth of misery and slavery. The relationship of rising rents and
rising misery is one example of the landlord's interest in society, for
a rise in house rent also means a rise in ground rent -- the interest
on the land on which the house stands.
(2) According to the political economists themselves, the
interest of the landlord is fiercely opposed to that of the tenant, and
therefore of a considerable section of society.
(3) The landlord is in a position to demand more rent from the
tenant the less wages the tenant pays out, and the more rent the
landlord demands the further the tenant pushes down the wages. For this
reason, the landlord's interest is just as opposed to that of the farm
laborer as the manufacturer's is to that of the workers. It likewise
pushes wages down to a minimum.
(4) Since a real reduction in the price of manufactured products
puts up the rent of land, the landowner has a direct interest in
depressing the wages of the factory worker, in competition among the
capitalists, in overproduction and in all the misery occassioned by
industry.
(5) So the interest of the landowner, far from being identical
with the interest of society, is fiercely opposed to the interests of
the tenants, the farm laborers, the factory workers, and the
capitalists. But, as a result of competition, the interest of one
landowner is not even identical with that of another. We shall now take
a look at competition.
Generally speaking, large landed property and small landed property are
in the same relation to one another as large and small capital. In
addition, however, there are special circumstances which lead, without
fail, to the accumulation of large landed property and the swallowing
up of small properties.
(1) Nowhere does the number of workers and the amount of
equipment decline so greatly in proportion to the size of the stock as
in landed property. Similarly, nowhere does the possibility of
many-sided exploitation,the saving of proportion costs and the
judicious division of labor increase more in proportion to that stock
than in this sphere. Whatever the size of the plot, there is a certain
minimum of tools required -- a plough, a saw, etc. -- below which it is
impossible to go, whereas there is no such lowermost limit to the size
of the property.
(2) Large landed property accumulated for itself the interest on
the capital which the tenant has invested in the improvement of the
land. Small landed property must employ its own capital. The entire
profit on this capital is lost to the investor.
(3) While every social improvement benefits the large landed
property, it harms the small one, since it makes an increasingly large
amount of ready money necessary.
(4) There are two further important laws of this competition to
be considered:
(a) "... the rent of the cultivated land, of which the produce
is human food, regulates the rent of the greater part of the
other cultivated land."
[ Smith, I, p. 144 ]
In the long run, only the large estate can produce sources of food such
as cattle, etc. It is, therefore, in a position to regulate the rent of
other land and force it down to a minimum.
The small landowner who works on his own account is, therefore, in the
same relation to the big landowner as the craftsman who owns his own
tools is to the factory owner. The small estate has become a mere tool.
Ground rent disappears entirely for the small landowner; at the most,
there remains to him the interest on his capital and the wages of his
labor, for ground rent can be forced so low by competition that it
becomes nothing more than the interest on capital not invested by the
owner himself.
(b) Furthermore, we have already seen that given equal fertility
and equally effective exploitation of lands, mines, and fisheries, the
produce is in proportion to the extent of capital employed. Hence, the
victory of the large landowner. Similarly, where equal amounts of
capital are invested, the produce is in proportion to the degree of
fertility. That is to say, where capitals are equal, victory goes to
the owner of the more fertile land.
(c) "A mine of any kind may be said to be either fertile or
barren, according as the quantity of mineral which can be
brought from it by a certain quantity of labor is greater or
less than what can be brought by an equal quantity from the
greater part of other mines of the same kind."
[ Smith, I, p. 151 ]
"The most fertile coal-mine, too, regulates the price of
coals at all the other mines in its neighborhood. Both the
proprietor and the undertaker of the work find, the one that
he can get a greater rent, the other that he can get a
greater profit by somewhat underselling all their neighbors.
Their neighbors are soon obliged to sell at the same price,
though they cannot so well afford it, and though it always
diminishes, and sometimes takes away altogether both their
rent and their profit. Some works are abandoned altogether;
others can afford no rent, and can be wrought only by the
proprietor."
[ Smith, I, pp. 152-3 ]
"After the discover of the mines of Peru, the silver-mines
of Europe were, the greater part of them, abandoned....
This was the case, too, with the ancient mines of Peru,
after the discovery of those of Potosi."
[ Smith, I, p. 154 ]
What Smith says here of mines is more-or-less true of landed property in
general.
(d) "The ordinary market price of land, it is to be observed,
depends everywhere upon the ordinary market rate of
interest... if the rent of land should fall short of the
interest of money by a greater difference, nobody would buy
the land, which would soon reduce its ordinary price. On the
contrary, if the advantages should much more than compensate
the difference, everybody would buy the land, which would
soon raise its ordinary price."
[ Smith, I, p. 320 ]
If follows from this relation between ground rent and interest on money
that ground rent must continue to fall until eventually only the
richest people can afford to live from it. This means an increase in
competition between those landowners who do not lease out their land.
Some of them are ruined. There is once again an accumulation of large
landed property.
This competition has the further consequence that a large part of
landed property falls into the hands of the capitalists; thus, the
capitalist becomes landowners, just as the smaller landowners are, in
general, nothing more than capitalists. In this way, a part of large
landed property becomes industrial.
So, the final consequence of the abolition of the distinction between
capitalist and landowner -- which means that, in general, there remain
only two classes in the population: the working class and the
capitalist class. This selling off of landed property, and
transformation of such property into a commodity, marks the final
collapse of the old aristocracy and the final victory of the
aristocracy of money.
(1) We refuse to join in the sentimental tears which romanticism
sheds on this account. Romanticism always confuses the infamy of
selling off the land with the entirely reasonable and, within
the system of private property, inevitable and desirable consequence of
the selling off of private property in land. In the first place,
feudal landed property is already in essence land which has been sold
off, land which has been estranged from man and now confronts him in
the shape of a handful of great lords.
In feudal landownership, we already find the domination of the earth as
of an alien power over men. The serf is an appurtenance of the land.
Similarly, the heir through primogeniture, the firstborn son, belongs
to the land. It inherits him. The rule of private property begins with
property in land, which is its basis. But in the system of feudal
landownership, the lord at least appears to be king of the land.
In the same way, there is still the appearance of a relationship
between owner and land which is based on something more intimate than
mere material wealth. The land is individualized with its lord,
it acquires his status, it is baronial or ducal with him, has his
privileges, his jurisdiction, his political position, etc. It appears
as the inorganic body of its lord. Hence the proverb, nulle terre sans maitre ["No land without its master"], which expresses the
blending of nobility and landed property. In the same way, the rule of
landed property does not appear directly as the rule of mere capital.
Its relationship to those dependent upon it is more like that of a
fatherland. It is a sort of narrow personality.
In the same way, feudal landed property gives its name to its lord, as
does a kingdom to its king. His family history, the history of his
house, etc. -- all this individualizes his estate for him, and formally
turns it into his house, into a person. Similarly, the workers on the
estate are not in the position of day-laborers; rather, they are
partly the property of the landowner, as are serfs, and they are partly
linked to him through a relationship based on respect, submissiveness,
and duty. His relation to them is therefore directly political, and
even has an agreeable aspect. Customs, character, etc., vary
from one estate to another and appear to be one with their particular
stretch of land; later, however, it is only a man's purse, and not his
character or individuality, which ties him to the land. Finally, the
feudal landowner makes no attempt to extract the maximum profit from
his property. Rather, he consumes what is there and leaves the
harvesting of it to his serfs and tenants. Such is the
aristocratic condition of landownership, which sheds a romantic
glory on its lords.
It is inevitable that this appearance should be abolished and that
landed property, which is the root of private property, should be drawn
entirely into the orbit of private property and become a commodity;
that the rule of the property owner should appear as the naked rule of
private property, of capital, divested of all political tincture; that
the relationship between property owner and worker should be reduced to
the economic relationship between the property owner and his property
should come to an end, and that the property itself should become
purely material wealth; that the marriage of interest with the land
should take over from the marriage of honor, and that land, like man,
should sink to the level of a venal object. It is inevitable that the
root of landed property -- sordid self-interest -- should also manifest
itself in its cynical form. It is inevitable that immovable monopoly
should become mobile and restless monopoly, competition; and that the
idle employment of the products of the sweat and blood of other people
should become a brisk commerce in the same. Finally, it is inevitable
under these conditions of competition that landed property, in the form
of capital, should manifest its domination both over the working class
and over the property owners themselves, inasmuch as the laws of the
movement of capital are either ruining or raising them. In this way,
the mediaeval saying nulle terre sans seigneur gives way to the
modern saying l'argent n'a pas de maitre ["Money knows no
master"], which is an expression of the complete domination of dead
matter over men.
(2) The following observations can be made in connection with
the controversy over whether or not to divide up landed property.
The division of landed property negates the large-scale monopoly of
landed property, abolishes it, but only by generalizing it. It does not
abolish the basis of monopoly, which is private property. It attacks
the existence, but not the essence, of monopoly. The consequence is
that it falls foul of the laws of private property. For to divide up
landed property corresponds to the movement of competition in the
industrial sphere. Apart from the economic disadvantages of this
division of the instruments of labor and separation of labor (not to be
confused with the division of labor; this is not a case of dividing up
work among a number of individuals, but of each individual doing the
same work; it is a multiplication of the same work), this division of
the land, like competition in industry, inevitably leads to further
accumulation.
So wherever landed property is divided up, monopoly will inevitably
reappear in an even more repulsive form -- unless, that is, the
division of landed property itself is negated or abolished. This does
not mean a return to feudal property, but the abolition [Aufhebung] of
private property is land altogether. The first step in the abolition of
monopoly is always to generalize and extend its existence. The
abolition of monopoly, when it has reached its broadest and most
comprehensive existence, is its complete destruction. Association, when
applied to the land, retains the benefits of large landed property from
an economic point of view and realizes for the first time the tendency
inherent in the division of land, namely equality. At the same time,
association restores man's intimate links to the land in a rational
way, no longer mediated by serfdom, lordship, and an imbecile mystique
of property. This is because the earth ceases to be an object of
barter, and through free labor and free employment once again becomes
authentic, personal property for man. One great advantage of the
division of the land is that its masses, who are no longer prepared to
tolerate servitude, are destroyed by property in a different way from
those in industry.
As for large landed property, its apologists have always sophistically
identified the economic advantages inherent in large-scale agriculture
with large landed property, as if these advantages would not on the one
hand attain their fullest degree of development and on the other hand
become socially useful for the first time once property abolished.
Similarly, they have attacked the trading spirit of the small
landowners, as if large-scale landownership, even in its feudal form,
did not already contain within it the elements of barter -- not to
mention the modern English form, in which the feudalism of the
landowner is combined with the huckstering and the industry of the
tenant farmer.
Just as large-scale landed property can return the reproach of monopoly
made against it by the advocated of division of the land, for the
division of the land is also based on the monopoly of private property,
so can the advocates of division return the reproach of partition, for
partition of the land also exists -- though in a rigid, ossified form
-- on the large estates. Indeed, division is the universal basis of
private property. Besides, as the division of landed property leads
once more to large landed property in the form of capital wealth,
feudal landed property inevitably advances towards division or at least
falls into the hands of the capitalists, however much it might twist
and turn.
For large-scale landed property, as in England, drives the overwhelming
majority of the population into the arms of industry and reduces its
own workers to total misery. In this way, it creates and increases the
power of its enemy, capital and industry, by driving the poor and an
entire range of activities over to the other side. It makes the
majority of the country industrial, and hence antagonistic to landed
property. Where industry has acquired great power, as in England, it
gradually forces large landed property to give up its monopoly against
foreign countries and obliges it to compete with foreign landed
property. For under the rule of industry, landed property could
maintain its feudal proportions only by means of a monopoly against
foreign countries, so as to protect itself against the universal laws
of trade which contradict its feudal nature. Once exposed to
competition, it is forced to obey the laws of competition, just like
any other commodity which is subject to them. It too begins to
fluctuate, to increase and diminish, to fly from one hand into another,
and no law is any longer capable of keeping it in a few predestined
hands, or, at any event, surrender to the power of the industrial
capitalists.
Finally, large landed property, which has been forcibly preserved in
this way and which has given rise alongside itself to an extensive
industry, leads more rapidly to a crisis than does the division of
landed property, alongside which the power of industry invariably takes
second place.
It is clear from the case of England that large landed property has
cast off its feudal character and assumed an industrial character
insofar as it wants to make as much money as possible. It yields the
owner the biggest possible rent and the tenant the biggest possible
profit on his capital. As a consequence, the agricultural workers have
already been reduced to a minimum, and the class of tenant farmers
already represents within landed property the might of industry and
capital. As a result of foreign competition, ground rent more or less
ceases to be an independent source of income. A large part of the
landowners is forced to take over from the tenants, some of whom are
consequently reduced to the proletariat. On the other hand, many
tenants will take possession of landed property; for the big
landowners, who have given themselves up for the most part to
squandering their comfortable revenue and are generally not capable of
large-scale agricultural management, in many cases have neither the
capital nor the ability to exploit the land. Therefore, a section of
the big landowners is also ruined. Eventually wages, which have already
been reduced to a minimum, must be reduced even further in order to
meet the new competition, This then leads necessarily to revolution.
Landed property had to develop in each of these two ways, in order to
experience in both of them its necessary decline; just as industry had
to ruin itself both in the form of monopoly and in the form of
competition before it could believe in man.
ESTRANGED LABOR
We have started out from the premises of political
economy. We have accepted its language and its laws. We presupposed
private property; the separation of labor, capital, and land, and
likewise of wages, profit, and capital; the division of labor;
competition; the conception of exchange value, etc. From political
economy itself, using its own words, we have shown that the worker
sinks to the level of a commodity, and moreover the most wretched
commodity of all; that the misery of the worker is in inverse
proportion to the power and volume of his production; that the
necessary consequence of competition is the accumulation of capital in
a few hands and hence the restoration of monopoly in a more terrible
form; and that, finally, the distinction between capitalist and
landlord, between agricultural worker and industrial worker, disappears
and the whole of society must split into the two classes of property owners and propertyless workers.
Political economy proceeds from the fact of private property. It does
not explain it. It grasps the material process of private
property, the process through which it actually passes, in general and
abstract formulae which it then takes as laws. It does not
Comprehend these laws -- i.e., it does not show how they
arise from the nature of private property. Political economy fails to
explain the reason for the division between labor and capital. For
example, when it defines the relation of wages to profit, it takes the
interests of the capitalists as the basis of its analysis --
i.e., it assumes what it is supposed to explain. Similarly,
competition is frequently brought into the argument and explained in
terms of external circumstances. Political economy teaches us nothing
about the extent to which these external and apparently accidental
circumstances are only the expression of a necessary development. We
have seen how exchange itself appears to political economy as an
accidental fact. The only wheels which political economy sets in motion
are greed, and the war of the avaricious --
Competition.
Precisely because political economy fails to grasp the interconnections
within the movement, it was possible to oppose, for example, the
doctrine of competition to the doctrine of monopoly, the doctrine of
craft freedom to the doctrine of the guild, and the doctrine of the
division of landed property to the doctrine of the great estate; for
competition, craft freedom, and division of landed property were
developed and conceived only as accidental, deliberate, violent
consequences of monopoly, of the guilds, and of feudal property, and
not as their necessary, inevitable, and natural consequences.
We now have to grasp the essential connection between private property,
greed, the separation of labor, capital and landed property, exchange
and competition, value and the devaluation [Entwertung] of man,
monopoly, and competition, etc. -- the connection between this entire
system of estrangement [Entfremdung] and the money system.
We must avoid repeating the mistake of the political economist, who
bases his explanations on some imaginary primordial condition. Such a
primordial condition explains nothing. It simply pushes the question
into the grey and nebulous distance. It assumes as facts and events
what it is supposed to deduce -- namely, the necessary relationships
between two things, between, for example, the division of labor and
exchange. Similarly, theology explains the origin of evil by the fall
of Man -- i.e., it assumes as a fact in the form of history what
it should explain.
We shall start out from a present-day economic fact.
The worker becomes poorer the more wealth he produces, the more his
production increases in power and extent. The worker becomes an ever
cheaper commodity the more commodities he produces. The
devaluation of the human world grows in direct proportion to the
increase in value of the world of things. Labor not only
produces commodities; it also produces itself and the workers as a
commodity and it does so in the same proportion in which it
produces commodities in general.
This fact simply means that the object that labor produces, it product,
stands opposed to it as something alien, as a power independent
of the producer. The product of labor is labor embodied and made
material in an object, it is the objectification of labor. The
realization of labor is its objectification. In the sphere of political
economy, this realization of labor appears as a loss of reality
for the worker, objectification as loss of and bondage to the object,
and appropriation as estrangement, as alienation
[Entausserung].
So much does the realization of labor appear as loss of reality that
the worker loses his reality to the point of dying of starvation. So
much does objectification appear as loss of the object that the worker
is robbed of the objects he needs most not only for life but also for
work. Work itself becomes an object which he can only obtain through
an enormous effort and with spasmodic interruptions. So much does the
appropriation of the object appear as estrangement that the more
objects the worker produces the fewer can he possess and the more he
falls under the domination of his product, of capital.
All these consequences are contained in this characteristic, that the
workers is related to the product of labor as to an alien
object. For it is clear that, according to this premise, the more the
worker exerts himself in his work, the more powerful the alien,
objective world becomes which he brings into being over against
himself, the poorer he and his inner world become, and the less they
belong to him. It is the same in religion. The more man puts into God,
the less he retains within himself. The worker places his life in the
object; but now it no longer belongs to him, but to the object. The
greater his activity, therefore, the fewer objects the worker
possesses. What the product of his labor is, he is not. Therefore, the
greater this product, the less is he himself. The externalization
[Entausserung] of the worker in his product means not only that his
labor becomes an object, an external existence, but that it exists
outside him, independently of him and alien to him, and beings
to confront him as an autonomous power; that the life which he has
bestowed on the object confronts him as hostile and alien.
Let us not take a closer look at objectification, at the production of
the worker, and the estrangement, the loss of the objet, of his
product, that this entails.
The workers can create nothing without nature, without the sensuous
external world. It is the material in which his labor realizes itself,
in which it is active and from which, and by means of which, it
produces.
But just as nature provides labor with the means of life, in the sense
of labor cannot live without objects on which to exercise itself, so
also it provides the means of life in the narrower sense, namely the
means of physical subsistence of the worker.
The more the worker appropriates the external world, sensuous nature,
through his labor, the more he deprives himself of the means of life in
two respects: firstly, the sensuous external world becomes less and
less an object belonging to his labor, a means of life of his labor;
and, secondly, it becomes less and less a means of life in the
immediate sense, a means for the physical subsistence of the worker.
In these two respects, then, the worker becomes a slave of his object;
firstly, in that he receives an object of labor, i.e., he
receives work, and, secondly, in that he receives means of subsistence.
Firstly, then, so that he can exists as a worker, and secondly as a
physical subject. The culmination of this slavery is that it is only
as a worker that he can maintain himself as a physical subject and only
as a physical subject that he is a worker.
(The estrangement of the worker in his object is expressed according to
the laws of political economy in the following way:
the more the worker produces, the less he has to consume;
the more value he creates, the more worthless he becomes;
the more his product is shaped, the more misshapen the worker;
the more civilized his object, the more barbarous the worker;
the more powerful the work, the more powerless the worker;
the more intelligent the work, the duller the worker and the
more he becomes a slave of nature.)
Political economy conceals the estrangement in the nature of labor by
ignoring the direct relationship between the worker (labor) and
production. It is true that labor produces marvels for the rich, but it
produces privation for the worker. It produces palaces, but hovels for
the worker. It produces beauty, but deformity for the worker. It
replaces labor by machines, but it casts some of the workers back into
barbarous forms of labor and turns others into machines. It produces
intelligence, but it produces idiocy and cretinism for the worker.
The direct relationship of labor to its products is the relationship of
the worker to the objects of his production. The relationship of the
rich man to the objects of production and to production itself is only
a consequence of this first relationship, and confirms it.
Later, we shall consider this second aspect. Therefore, when we ask
what is the essential relationship of labor, we are asking about the
relationship of the worker to production.
Up to now, we have considered the estrangement, the alienation of the
worker, only from one aspect -- i.e., his relationship to the
products of his labor. But estrangement manifests itself not only in
the result, but also in the act of production, within the activity of
production itself. How could the product of the worker's activity
confront him as something alien if it were not for the fact that in the
act of production he was estranging himself from himself? After all,
the product is simply the resume of the activity, of the production. So
if the product of labor is alienation, production itself must be active
alienation, the alienation of activity, the activity of alienation. The
estrangement of the object of labor merely summarizes the estrangement,
the alienation in the activity of labor itself.
What constitutes the alienation of labor?
Firstly, the fact that labor is external to the worker -- i.e.,
does not belong to his essential being; that he, therefore, does not
confirm himself in his work, but denies himself, feels miserable and
not happy, does not develop free mental and physical energy, but
mortifies his flesh and ruins his mind. Hence, the worker feels himself
only when he is not working; when he is working, he does not feel
himself. He is at home when he is not working, and not at home when he
is working. His labor is, therefore, not voluntary but forced, it is
forced labor. It is, therefore, not the satisfaction of a need
but a mere means to satisfy needs outside itself. Its alien
character is clearly demonstrated by the fact that as soon as no
physical or other compulsion exists, it is shunned like the plague.
External labor, labor in which man alienates himself, is a labor of
self-sacrifice, of mortification. Finally, the external character of
labor for the worker is demonstrated by the fact that it belongs not to
him but to another, and that in it he belongs not to himself but to
another. Just as in religion the spontaneous activity of the human
imagination, the human brain, and the human heart, detaches itself from
the individual and reappears as the alien activity of a god or of a
devil, so the activity of the worker is not his own spontaneous
activity. It belongs to another, it is a loss of his self.
The result is that man (the worker) feels that he is acting freely only
in his animal functions -- eating, drinking, and procreating, or at
most in his dwelling and adornment -- while in his human functions, he
is nothing more than animal.
It is true that eating, drinking, and procreating, etc., are also
genuine human functions. However, when abstracted from other aspects of
human activity, and turned into final and exclusive ends, they are
animal.
We have considered the act of estrangement of practical human activity,
of labor, from two aspects: (1) the relationship of the worker
to the product of labor as an alien object that has power over him. The
relationship is, at the same time, the relationship to the sensuous
external world, to natural objects, as an alien world confronting him,
in hostile opposition. (2) The relationship of labor to the
act of production within labor. This relationship is the
relationship of the worker to his own activity as something which is
alien and does not belong to him, activity as passivity [Leiden], power
as impotence, procreation as emasculation, the worker's own physical
and mental energy, his personal life -- for what is life but activity?
-- as an activity directed against himself, which is independent of him
and does not belong to him. Self-estrangement, as compared with the
estrangement of the object [Sache] mentioned above.
We now have to derive a third feature of estranged labor from the two
we have already examined.
Man is a species-being, not only because he practically and
theoretically makes the species -- both his own and those of other
things -- his object, but also -- and this is simply another way of
saying the same thing -- because he looks upon himself as the present,
living species, because he looks upon himself as a universal and
therefore free being.
Species-life, both for man and for animals, consists physically in the
fact that man, like animals, lives from inorganic nature; and because
man is more universal than animals, so too is the area of inorganic
nature from which he lives more universal. Just as plants, animals,
stones, air, light, etc., theoretically form a part of human
consciousness, partly as objects of science and partly as objects of
art -- his spiritual inorganic nature, his spiritual means of life,
which he must first prepare before he can enjoy and digest them -- so,
too, in practice they form a part of human life and human activity. In
a physical sense, man lives