Saturday, March 26, 2016

Marx’s Capital, Volume 1, Chapter 20: A Critical Summary

Chapter 20 of volume 1 of Capital is called “Time-Wages” and deals with wages paid by the hour.

Wages can take various forms but the two fundamental forms are time wages or piece wages (Marx 1990: 683).

In essence, the hourly wage can be calculated by the value of a day of labour-power (the subsistence wage equal to the value of the maintenance and reproduction of labour-power) divided by the number of hours in a working day (Brewer 1984: 64). As the working day rises so the hourly wage rate must fall (Brewer 1984: 64).

The laws that Marx expounded in Chapter 17 apply to wages:
“… the laws set forth, in the 17th chapter, on the changes in the relative magnitudes of price of labour-power and surplus-value, pass by a simple transformation of form, into laws of wages. Similarly the distinction between the exchange-value of labour-power, and the sum of the necessaries of life into which this value is converted, now reappears as the distinction between nominal and real wages.” (Marx 1906: 594).
But Chapter 17 assumes that commodities tend to exchange at true labour values, and this is a necessary condition for the laws to hold, so once this assumption is abandoned (as in volume 3 of Capital), the laws fall apart.

Given a varying number of hours in the total working day, hourly wages vary too:
“The sum of money which the labourer receives for his daily or weekly labour, forms the amount of his nominal wages, or of his wages estimated in value. But it is clear that according to the length of the working-day, that is, according to the amount of actual labour daily supplied, the same daily or weekly wage may represent very different prices of labour, i.e., very different sums of money for the same quantity of labour. We must, therefore, in considering time-wages, again distinguish between the sum total of the daily or weekly wages, &c, and the price of labour. How then to find this price, i.e., the money-value of a given quantity of labour? The average price of labour is found, when the average daily value of the labour-power is divided by the average number of hours in the working-day.” (Marx 1906: 595).
So the “price of the working hour thus found serves as the unit measure for the price of labour” (Marx 1906: 595).

We must remember that the daily wage tends to be the value of the maintenance and reproduction of labour-power, a subsistence wage, although that subsistence wage may change given the length and intensity of work performed by the labourer in a day.

Marx states a general law:
“As a general law it follows that, given the amount of daily, weekly labour, &c, the daily or weekly wages depend on the price of labour which, itself varies either with the value of labour-power, or with the difference between its price and its value. Given, on the other hand, the price of labour, the daily or weekly wages depend on the quantity of the daily or weekly labour.

The unit measure for time-wages, the price of the working-hour, is the quotient of the value of a day’s labour-power, divided by the number of hours of the average working-day.” (Marx 1906: 596).
If the working week or day does not have enough hours to maintain the subsistence wage, then
“The capitalist can now wring from the labourer a certain quantity of surplus-labour without allowing him the labour-time necessary for his own subsistence. He can annihilate all regularity of employment, and according to his own convenience, caprice, and the interest of the moment, make the most enormous over-work alternate with relative or absolute cessation of work. He can, under the pretence of paying ‘the normal price of labour,’ abnormally lengthen the working-day without any corresponding compensation to the labourer.” (Marx 1906: 597).
Marx presents the following formula:

Daily value of labour-power
Working day

This gives us the hourly wage rate.

With the total working day fixed by law, there arose overtime payments, but Marx thinks that these, generally speaking, do not adequately pay workers for their work:
“The value of labour-power, as dependent on its wear and tear, increases with the duration of its functioning, and in more rapid proportion than the increase of that duration. In many branches of industry where time-wage is the general rule without legal limits to the working-time, the habit has, therefore, spontaneously grown up of regarding the working-day as normal only up to a certain point, e.g., up to the expiration of the tenth hour (‘normal working-day,’ ‘the day's work,’ ‘the regular hours of work’). Beyond this limit the working-time is over-time, and is, taking the hour as unit-measure, paid better (‘extra pay’), although often in a proportion ridiculously small. The normal working-day exists here as a fraction of the actual working-day, and the latter, often during the whole year, lasts longer than the former. The increase in the price of labour with the extension of the working-day beyond a certain normal limit, takes such a shape in various British industries that the low price of labour during the so-called normal time compels the labourer to work during the better paid over-time, if he wishes to obtain a sufficient wage at all. Legal limitation of the working-day puts an end to these amenities.” (Marx 1906: 598–599).
As the working day rises, the hourly wage falls (Marx 1990: 688).

Marx sees the following trend:
“From the law: ‘the price of labour being given, the daily or weekly wage depends on the quantity of labour expended,’ it follows, first of all, that, the lower the price of labour, the greater must be the quantity of labour, or the longer must be the working-day for the labourer to secure even a miserable average-wage. The lowness of the price of labour acts here as a stimulus to the extension of the labour-time.” (Marx 1906: 601–602).
As in the previous chapter Marx is clear that capitalists themselves do not even understand the concept of unpaid labour time:
“… the appearance only of the relations of production mirrors itself in the brain of the capitalist. The capitalist does not know that the normal price of labour also includes a definite quantity of unpaid labour, and that this very unpaid labour is the normal source of his gain. The category, surplus-labour-time, does not exist at all for him, since it is included in the normal working-day, which he thinks he has paid for in the day’s wages.” (Marx 1906: 602).
This is another quite absurd aspect of Marxist theory: it claims to identify fundamental processes of capitalism which everyone except the Marxists themselves are blind to.

Brewer, Anthony. 1984. A Guide to Marx’s Capital. Cambridge University Press, Cambridge.

Harvey, David. 2010. A Companion to Marx’s Capital. Verso, London and New York.

Marx, Karl. 1906. Capital. A Critique of Political Economy (vol. 1; rev. trans. by Ernest Untermann from 4th German edn.). The Modern Library, New York.

Marx, Karl. 1990. Capital. A Critique of Political Economy. Volume One (trans. Ben Fowkes). Penguin Books, London.

1 comment:

  1. I don't think you really understand Marx's point about commodities not selling at their value - monopoly prices simply shift the composition of aggregate value of society. Commodities not selling at their value doesn't change general laws, just how the value is distributed.

    "This is another quite absurd aspect of Marxist theory: it claims to identify fundamental processes of capitalism which everyone except the Marxists themselves are blind to."

    This isn't an argument. If Keplar said "the absence of epicycles is a concept alien to most astronomers" you wouldn't berate him for "identifying processes which everyone but Keplar misunderstands".