Remarks on Marx’s Economic and Philosophic Manuscripts of 1844

Wages and class struggle

Karl Marx’s opening line in the first chapter of Economic and Philosophic Manuscripts of 1844 states that, “wages are determined by antagonistic struggle between capitalist and worker.” (p. 19)

This opening line is often cited by nominal leftists as explanation for exorbitantly high wages of many workers in the United States and throughout the First World. The explanation they reach is that First World workers receive such high wages because they have secured them as historic concessions over the course of past class struggle. But this view is narrow and has quite specific limitations.

In terms of scope, this explanatory view negates the workings of capitalism internationally. Wages of all workers have hardly risen, just those within certain spatial and social limitations (i.e., those within the First World and often part of oppressor nations). The notable idea ignored by the First Worldist viewpoint is that while class struggle certainly may have played a role in elevating the status and material fulfillment of First World workers, this class struggle may not have occurred on their part alone. Instead, the raising of wages for a limited number of worker, i.e. those mainly in the First World, was a measure to counteract not merely their own class struggle but that of the international proletariat. During the 20th century, the international proletariat advanced in their struggle in many regards. They were able to establish nominally socialist states which for a time acted as economic and political bulwarks against capitalist-imperialism. As well, the proletariat of the Third World waged several wars of liberation against direct imperialist occupation and neo-colonial puppets. It was no doubt such heightened class struggle which played a large role in determining the wages of First World countries, so as the secure their passivity and tacit support of the system at the moment it was facing its greatest challenges from the international proletariat movement.

What does the proletariat look like?

In Economic Manuscripts, Marx offers a basic sketch of the condition of the worker under capitalism. He states, “The worker has neither ground rent nor interest on capital to supplement his industrial income.[…] The worker need not necessarily gain when the capitalist does, but he necessarily loses when the latter does,” and, “The whole of society must fall apart into two classes- the property owners and the propertyless workers.” (p. 19, 21, 69)

Marx is talking about an abstracted model of capitalism, along with abstracted workers and abstracted capitalists functioning as part of distinct classes. Yet nonetheless, his description of both the fundamental workings of the system and its symptoms are salient today.

In many ways the vast majority of the workers of the First World exist outside the archetype Marx has set forth. Historically, most Amerikans receive some portion of their income in the form of interest on savings or own appreciable capital assets. (Gallup) Throughout the 20th century, the standard of living for most Amerikans rose in a corresponding fashion to the ascendancy of Amerikan monopoly capital. However, when we extend our scope and envision “society” as the entire globe, Marx’s vision begins to make more sense. Few throughout the world gain any income on rent or interest on capital, and thus most are forced to live solely through the sale of labor. As well, the material status of the global population has barely risen over the past 100 years, reaffirming the idea that workers “need not necessarily gain when the capitalist does.” Instead, the value of Third World labor power (i.e., wages sufficient for their own physical livelihood) has been suppressed to the lowest amount possible, and starvation and malnutrition remain a persistent problem for many Third World workers and those part of the ‘reserve army of labor.’

Stratification of classes internationally

Marx saw the world in 1844 as dividing into two largely monolithic blocs of propertied capitalists and propertyless proletarians. In some respects, if looking internationally, this has largely been the case. We can find increasing disparity both in individual capitalist countries, but more importantly also between international capitalists and the global working class.

Yet at the same time, there have been some mitigating factors which have thus far inhibited this division of the world into two distinct class, namely the growth of the ‘middle class’ mainly in First World countries over the past 150 years. That is to say an international division of labor has developed in which one small portion of the global labor supply is elevated above the rest. This occurred with great impact.

This trend of the separation of First World workers from the global proletariat was noted early on by different radical thinkers.

In the 1915 essay entitled African Roots of War, Black intellectual WEB DuBois was the first to note that,

“The white workingman has been asked to share the spoil of exploiting ‘chinks and niggers.’ It is no longer simply the merchant prince, or the aristocratic monopoly, or even the employing class, that is exploiting the world: it is the nation; a new democratic nation composed of united capital and labor. The laborers are not yet getting, to be sure, as large a share as they want or will get, and there are still at the bottom large and restless excluded classes. But the laborer’s equity is recognized, and his just share is a matter of time, intelligence, and skillful negotiation.

“Such nations it is that rule the modern world. Their national bond is no mere sentimental patriotism, loyalty, or ancestor worship. It is increased wealth, power, and luxury for all classes on a scale the world never saw before. Never before was the average citizen of England, France, and Germany so rich, with such splendid prospects of greater riches. Whence comes this new wealth and on what does its accumulation depend? It comes primarily from the darker nations of the world — Asia and Africa, South and Central America, the West Indies and the islands of the South Seas.”

In Russia the same year, Nikolai Bukharin published Imperialism and World Economy, which also noted the emergence of a ‘labor aristocracy’ in regards to imperialism:

“The colonial policy yields a colossal income to the great powers, i.e., to their ruling classes, to the ‘state capitalist trust.’ This is why the bourgeoisie pursues a colonial policy. This being the case, there is a possibility for raising the workers’ wages at the expense of the exploited colonial savages and conquered peoples.” (p 165)

A few years later Lenin developed this idea further, specifically in regards to the direction of the labor movement internationally. He stated in the preface to the German and French editions to Imperialism, the Highest Stage of Capitalism that, “This stratum of workers-turned-bourgeois, or the labor aristocracy, who are quite philistine in their mode of life, in the size of their earnings and in their entire outlook, is… the principal social (not military) prop of the bourgeoisie. For they are the real agents of the bourgeoisie in the working-class movement, the labor lieutenants of the capitalist class, real vehicles of reformism and chauvinism.”

As well during the same period, in 1920, Chinese Marxist Li Dazhao put forth his thesis that China had been rendered a “proletarian nation” by the aspirations of various imperialist powers, with the implication that the latter were ‘bourgeois nations.’ The implication was also nationalistic: virtually all in China could unite in a common struggle against foreign monopoly capital, and this struggle was objectively part of the global proletarian movement. (Meisner p. 188)

It is notable yet that these observations came forth independently during the same period between 1915-20. It was during this period in which the reality of the global division of labor and its implication became too apparent to ignore.

Emergence of non-productive labor in the process of capital accumulation

Where these thinkers were immature in their thought was in the role of the development of non-productive sectors. As is often the case, non-productive sectors actually dominate economies in terms of value circulation, even though they may not be the original source of said value.

The non-productive sector of the economy at minimum includes those employed by the state (including the police, judiciary, clerks, civil service and social workers), those employed as managers, involved in advertising and customer service, employed by the financial sectors. At the most it includes all those whose labor is employed not for the creation of commodities but merely as facilitators of their circulation (thus, we could include workers such as cashiers, retail workers, waiters, commercial drivers, charity workers, people in the non-profit sector, etc. as non-productive). Marx’s general assumption is that non-productive labor does not create value itself, but merely facilitates its greatest potential realization. Despite this, Marx tended to consider non-productive workers part of the proletariat simply because non-productive labor was tertiary to the overall process of capital accumulation and those engaged in it tended to socially approximate as part of the proletariat rather than capitalists.

Another line of thinking has emerged, as noted by David Harvey in his video lecture series, Reading Capital, which bundles all labor together as ‘socially necessary,’ and hence ‘productive’ in a sense, insofar as it facilitates and regulates the distribution of surplus and the accumulation of capital generally. (Lecture 10) This is broadly in line with the concept of capital accumulation acting as an organic process, i.e. the unproductive sector serves to fully realize value from the productive sector and rests upon the value created under the latter. Under this schema, we can treat virtually all work as ‘socially necessary labor’ for the full realization of value under the conditions on modern capitalist-imperialism.

However, this makes no broad assumptions about wages, except that it denotes such as the main indicator of a worker’s relation to the process of capital accumulation.

Division of labor-power under capitalism

Insofar as we can treat all economic transactions as ‘necessary’ under capitalism, we can find an average value of labor in this commodity exchange system.

For example, if it takes 1 hour of Third World [TW] labor paid $1 and 1 hour of First World [FW] labor paid at $20 to realize $36 [above the cost of consumed fixed capital] at final exchange, we would find that the average total value [wages plus surplus] produced by each abstract hour of labor is $18.

{one hour FW($20)}+{one hour TW($1)}+{surplus appropriated($15)=$36={value produced by 2 hours of ‘socially necessary labor’}

{value produced($36)/2hours}={value produced($18)/1 hour}

In this example, the FW workers are paid above the amount of value produced by a socially necessary (i.e. abstract) hour of labor. That is to say the price of their wages is above the value they actually produce. For the FW worker, the $2 in hourly wages above the value produced by socially-necessary labor allows the said worker to consume the product of one and one-tenth hours of abstract labor.

{$20(price or wage of 1 hour of FW labor)}={1.11*18(11% more than the value produced by socially necessary labor)}

This $2 is necessarily drawn from the surplus created by the TW worker. Were it not for the employment of such TW labor at such a rate, this $2 above the value of abstract labor yet included in the wages of the FW worker could not exist. Whereas each hour of abstract labor yields $18 in total value, under this schema, we can see how an FW worker can be paid above this rate, but only so long as their labor is part of a process also involving that of negligibly paid TW labor.

Even disregarding the notion that unproductive labor is just that, unproductive and doesn’t itself produce value or surplus but is entirely drawn from the surplus created through productive labor, we can demonstrate, at least hypothetically, how wages can in fact be drawn in part from the exploited labor of workers elsewhere within the production process.

These ideas are allowed for in Marx’s ideas and methodology, which never assumed prices necessarily correlated with value, but rather that prices helped shift value around through different sectors of the economy. Moreover, under Marx’s conception of capitalism, capitalists weren’t the only people who could absorb surplus value. Landlords, for example, are not in any way part of the process of the creation of value, yet they draw in surplus value through charging rent both on workers and capitalists (i.e. they absorb surplus value as part of an extant process of value realized through economic circulation). In the same manner, through the structure of prices, it seems possible for many nominal workers, who could not be accounted for in detail by Marx during the 1800’s because they were not a significant feature of capitalism at the time, could also be counted as consumers of surplus value.

This proposal offers a mitigating factor that weighs against Marx’s idea that the world was dividing merely into two great classes and helps explain the contemporary class structures we see today. It seems instead of the world merely dividing into two classes, it was dividing principally into three: the masses of workers of the world forming the proletariat; a minority of global workers concentrated in imperialist metropoles which constitutes an international labor aristocracy paid over the value of abstract labor itself, who are partial exploiters and an appendage ruling class; and the international bourgeoisie, which dominates the world and is the chief holder of capital.

Further considerations

This analysis can and should proceed further.

We have hypothetically demonstrated, in line with Marx, how value created by one sector of the economy can be appropriated at another, including by nominal workers themselves. On the empirical level, such a phenomenon has been demonstrated by authors in the Dependency Theory and Unequal Exchange schools of though. Authors such as Walter Rodney, Teresa Hayter, Samir Amin and Arghiri Emmanuel detailed how little of the value created in the Third World is retained there.  Instead, it is exported to the First World, and economies are consciously structured for such purpose.

In a recent essay published by Monthly Review, John Bellamy Foster and Robert W. McChesney describe in empirical terms modern working conditions and wages which might fit into the above model of super-exploited Third World workers:

“In 2008 Chinese manufacturing workers on average, according to the U.S. Bureau of Labor Statistics, received only 4 percent of the wage compensation of manufacturing workers in the United States. Hence, the added margin of profit to be obtained by producing in China (with the same technology) instead of the United States or other developed countries can be enormous. Chinese workers that assemble iPhones for Foxconn, which subcontracts for Apple, are paid wages that only represent 3.6 percent of the final total manufacturing cost (shipping price), contributing to Apple’s huge 64 percent gross profit margin over manufacturing cost on iPhones, according to the Asian Development Bank.”

We can say that capital accumulation happens in two united manners. Value is primarily produced in the Third World under conditions of super-exploitation typical of capitalism. Yet as surplus, value is distributed for further appropriation primarily in the First World in a manner ordered along similar processional form of capitalism. In the aggregated sense, value is produced primarily by the Third World working classes and appropriated in the First World. In its parts in the process of capital accumulation, value is realized in somewhat fragmented ways seemingly independent of where the value actually may have been produced. That is to say, whilst most value and nearly all surplus is created through the super-exploitation of the Third World proletariat, it is also distributed and realized through further economic processes often ordered along capitalistic lines.

I imagine this general line of thought will be contested by noting that all wages are relative to the value of labor-power (the correspondent value necessary for the reproduction of labor in the sense of basic subsistence), which is generally higher in the First World. To this I would note that the value of labor-power is something historically and socially constructed. On one hand, through increasing efficiency and productivity, the basic necessities of life become cheaper to produce and hence does the value of labor power. On the other, the effective value of labor power can rise through the general want, demands and expectations of the working class (in in the case of a portion of the working class being co-opted by the bourgeoisie). Along the same line, labor power itself is purchased according to its given price, not its actual objective or abstract value, and hence can form another mechanism for the circulation of value and surplus value from the Third World to the First.

In such a manner, contemporary class structure is far more complex than Marx originally envisioned. During the process of colonialism, structures of super-exploitation of the Third World by First World emerged, which allowed for the initial creation of a labor aristocracy amongst the workers of imperialist centers. Due to class struggle internationally, it became all the more expedient for capital to expand and detach this First World labor aristocracy from the global proletariat. This labor aristocracy offers implicit support of the system as a whole and acts as a “social prop” of the bourgeoisie in exchange for wages which encompass a portion of surplus value wrung from the exploitation of the global proletariat, the latter who are always paid at or below labor power (the minimum required for subsistence).

Concluding remarks

While these developments inhibited the division of the world into two homogeneous classes, it occurred within a context of general capitalist-imperialist expansion. Marx tended to look at capitalism in its abstract form, under which it was a total system free from externalities. Whereas capitalism has thus far been able to secure for itself social leverage of one portion of the working class against others, as the world increasingly becomes saturated by capital and with less opportunity for capitalism to expand, it may increasingly conform to such an abstract vision. With diminishing ways for capital to grow, the prospects of maintaining First World workers in such aristocratic positions may become less tenable over time.

It may be the case that the labor aristocracy is losing some of it social foundation, and hence the prospects of Marx’s conclusion that “the whole of society must fall apart into two classes” may increasingly bare resemblance to fact. However, if it does occur, it will happen as part of an entirely different social context, along with the additional knowledge draw from the struggles over 160 years since Marx’s writing.

Bibliography:

Marx, Karl, and Friedrich Engels. Economic and philosophic manuscripts of 1844. Amherst, New York: Prometheus Books, 1988.

Jacobe, Dennis, and Chief Economist. “In U.S., 54% Have Stock Market Investments, Lowest Since 1999.” Gallup.Com. http://www.gallup.com/poll/147206/stock-market-investments-lowest-1999.aspx (accessed February 7, 2012).

DuBois, W. E. Burghardt. “African Roots of War.” WEBDuBois.org. http://www.webdubois.org/dbAfricanRWar.html.

Bukharin, Nikolai Ivanovich. Imperialism and world economy. London: Merlin Press, 1972.

Lenin, Vladmir. “Preface to the French and German Editions.” Marxists Internet Archive. http://www.marxists.org/archive/lenin/works/1916/imp-hsc/pref02.htm.

Harvey, David. “Reading Capital.” Reading Marx’s Capital with David Harvey . http://davidharvey.org/reading-capital/ (accessed February 3, 2012).

Meisner, Maurice J.. Li Ta-chao and the origins of Chinese Marxism,. Cambridge: Harvard University Press, 1967.

Rodney, Walter, A.M. Babu, and Vincent Harding. How Europe Underdeveloped Africa. Rev. pbk. ed. Washington, D.C.: Howard University Press, 1981.

Amin, Samir. Accumulation on a world scale; a critique of the theory of underdevelopment.. New York: Monthly Review Press, 1974.

Hayter, Teresa. The creation of world poverty. London: Pluto in association with Third World First, 1981.

Emmanuel, Arghiri. Unequal exchange; a study of the imperialism of trade. New York: Monthly Review Press, 1972.

Foster, John Bellamy, and Robert W. McChesney. “The Global Stagnation and China .” Monthly Review, An Independent Socialist Magazine. 14 Feb. 2012. <http://monthlyreview.org/2012/02/01/the-global-stagnation-and-china&gt;.