Marx was right about workers and wages
Marx was right about workers and wages
In an article for Mises Wire on 14 September a certain Allen Gindler sets out his view as to ‘Why Marx Was Wrong about Workers and Wages’.
We are told that ‘the Marxist approach to labor, which treats it as a commodity to be controlled by the state, is fundamentally flawed and dangerous to human liberty’. But Marx never advocated that, in a socialist society, ‘labour’ should be a commodity controlled by the state. In fact, he thought that in socialism ‘labour power’ should cease to be a commodity — something bought and sold on a market — and endorsed the slogan ‘Abolition of the Wages System’. The very fact that the wages system features in ‘ostensibly Marxist societies’ such as ‘the Soviet Union, China under Mao, and Cuba’ shows that they were not the sort of society that Marx envisaged replacing capitalism. They would more accurately be described as forms of ‘state-run capitalism’, but certainly not socialism.
‘By labour power or capacity for labour,’ wrote Marx, ‘is to be understood the aggregate of those mental and physical capabilities existing in a human being, which he exercises whenever he produces a use-value of any description’ (Capital, chapter 6).
This is a human capacity which exists in all forms of human society — humans work, and must work, to produce the useful things they need to survive. It is part of the human condition.
Labour power is not the same as ‘labour’ which is the product resulting from the exercise of human labour power:
‘When we speak of capacity for labour, we do not speak of labour, any more than when we speak of capacity for digestion, we speak of digestion’ (chapter 6).
‘What economists therefore call value of labour, is in fact the value of labour-power, as it exists in the personality of the labourer, which is as different from its function, labour, as a machine is from the work it performs’ (chapter 19).
Under capitalism labour power is bought and sold and so is treated as a commodity, even if a peculiar one. Gindler cites Karl Polanyi in The Great Transformation as arguing that labour power is a ‘fictitious commodity’ in the sense that ‘it is not produced for sale but is an inherent aspect of human life’. He misses Polanyi’s point which is not that it is a mistake to call labour power a commodity but that he was criticiszing such ‘an inherent aspect of human life’ being treated as a commodity, as something bought and sold on a market. Marx himself made the same point.
Similarly, Marx would not have disagreed with Mises himself that ‘labor cannot be treated as a commodity in the same way as goods and services because it is intrinsically linked to human choice and action.’ Textually, Marx wrote that ‘in contradistinction therefore to the case of other commodities, there enters into the determination of the value of labour-power a historical and moral element’. In fact, the whole Marxian concept of the economic class struggle is based on the purveyors of labour power being humans who choose and act and struggle to get the highest price for what they are selling and to be treated with some degree of dignity.
This distinction between ‘labour power’ and ‘labour’ is fundamental to Marx’s theory of wages and surplus value, but Gindler seems to be completely unaware of this, using the two words interchangeably as if they meant the same. He writes:
‘f labor power is a commodity, it is a very strange one indeed. According to Marx, this commodity is always sold below its value. In other words, workers are constantly selling their ability to work for less than it is worth, generating surplus value for the capitalist. But this raises a fundamental question: if labor is a commodity, why is it the only commodity that is consistently sold below its cost?’
In his writings on the economics of capitalism in the 1840s before Capital was published in 1867, Marx did accept the general view then prevailing amongst opponents of capitalism that workers were exploited through being forced to sell their ‘labour’ below its proper price. But further research and thought in the 1850s led him to make a distinction between labour power and its product (labour), and this is the view he puts in Capital. What workers sell is their labour power and, normally, at its value reflecting what it cost to create (what workers have to buy to keep themselves in working order and raise future workers to replace them in due course).
Marx’s theory of worker exploitation is based precisely on workers selling their labour power at its value. Surplus value arises as the difference between the value of labour power and the value of what workers produce. Actually, Gindler got it right in his opening paragraph when he wrote that ‘Marx argues that, under capitalism, workers are forced to sell their labor power to capitalists, who exploit them by paying wages that are less than the full value their labor produces’.
Gindler is not alone in mistakenly thinking that what workers sell for wages is their labour. It was made by all economists before (and in fact after) Marx. He tries to prove his point by introducing a self-employed plumber:
‘A plumber who owns their own tools and operates independently does not sell their labor power to a capitalist; instead they provide a service directly to customers and charge a fee for their work.’
According to him, in Marxist theory ‘this self-employed plumber would somehow be selling their labor power below its value’. But he had just said that the plumber does not sell his labour power! In fact, what self-employed plumbers sell is a commodity (their plumbing work) in which their labour is embodied and at a price which covers its cost of production plus the extra value their labour added. They get the full value of what they are selling.
Gindler apparently thinks that employed workers are in the same sort of position as a self-employed worker; that employed workers are each selling the product of their labour to their employer and getting the full price for it. Leaving aside the question of where, then, would the employer’s profits come from, Gindler needs to ask himself why self-employed plumbers sell their product at a higher price than the price that employed plumbers get from their employer for supposedly selling the same product. The embarrassing answer for him is that self-employed plumbers are selling the product of their labour while employed plumbers are selling their labour power with the product of their labour appropriated by their employer.
ADAM BUICK