Wage Labour and Capital & Value, Price and Profit

Nonfiction | Reference/Text Book | Adult | Published in 1848

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Part 2

Key Figures

Themes

Index of Terms

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Index of Terms

Bourgeoisie

In Karl Marx’s view, the advent of the industrial revolution transformed the bourgeoisie from self-employed businessmen, such as merchants, entrepreneurs, and bankers, into the economic ruling class of capitalists. The capitalist class owns the means of production (i.e., the capital and land necessary for large-scale production) and use their dominant position to exploit workers for profit.

Capital

Capital is made up of “the means of subsistence, the instruments of labour, [and] the raw materials” (WLaC, 25-26) that enable the capitalist mode of production to reproduce itself through the extraction of surplus labor and value.

Commodity

A commodity is any good or raw material that can be exchanged for any other good or raw material under the capitalist mode of production. This includes money, which allows for the easier exchange of different commodities. For Marx, a commodity is produced for the purpose of exchange, and not for immediate use by the individual who made it. This makes commodities inherently social: They fulfill a social need or want, and the labor that produces them is part of the larger division of labor that makes up society.

Labor Power

Labor power is what the worker sells to the capitalist in exchange for wages. Labor power is purchased for a specific amount of time and represents the potential labor a worker can complete during that time. Labor power is central to Marx’s labor theory of value because of the way it emphasizes the potentiality of the labor, which is turn is exploited by the capitalist and turned into surplus-value.

Price

Price is the exchange value of any given commodity expressed in money. Wages are just a special name given to the price of labor-power.

Supply and Demand

Supply and demand refer to two forces that influence the price of commodities on the market. Supply is determined by the number of sellers looking to sell at a given moment, while demand is the number of buyers looking to buy. For Marx, while supply and demand can cause increases or decreases in the price of a commodity in individual instances, they do not impact the average price when the market—and industry at large—is viewed in its entirety.

Surplus Value/Surplus Labor

Surplus value is the value that is produced by surplus labor and represents profit made by the capitalist. Surplus labor occurs after the worker has produced value equal to their wages through their labor, but are required to work additional hours based on the contract they have entered with the capitalist. Anything produced during this time is surplus value and is pocketed by the capitalist as profit.

Wages (Real and Relative)

Wages are the price of labor power. Marx uses labor power, not labor, because this emphasizes his assertion that what the capitalist gets in return for wages is the right to the worker’s labor for a stipulated amount of time, not the labor performed. The value of wages is determined by the minimum cost to ensure the survival and reproduction of workers. Marx also uses the terms “real wages” (the amount of commodities that wages can be exchanged for on the market, such as bread, rice, or cotton), and “relative wages” (the share of the laborer’s product received relative to the amount of profit the capitalist makes).