Marx's Theory of the Value of Labor Power: An Assessment

Marx's Theory of the Value of Labor Power: An AssessmentAuthor(s): PHILIP HARVEYSource: Social Research, Vol. 50, No. 2 (SUMMER 1983), pp. 305-344Published by: The New SchoolStable URL: http://www.jstor.org/stable/40970881 .

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Marx's Theory of the Value of Labor Power: An Assessment , 'BY PHILIP HARVEY

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v>/ne of the paradoxes of the labor theory of value as it was formulated by Marx's classical predecessors was that it seemed self-contradictory when applied to the exchange of labor for a wage. If labor is the sole source of value, then it would seem that a certain amount of labor should have the same value, whether it is purchased directly for a wage or already embodied in a commodity. In a capitalist society, though, the wages paid for a certain amount of labor must be less than the value of the commodities in which that amount of labor is embodied. Otherwise neither profit nor rent could exist.

Pre- Marxian proponents of the labor theory of value got around this problem by abandoning the theory in their discus- sions of wage determination. Instead, they relied upon a de- mographically driven supply-and-demand model.1 Marx viewed this as a weakness in their work and felt that in his own theory of the value of labor power he had succeeded in formulating a theory of wages and surplus value which was in strict logical conformity with the labor theory of value.2

Was he successful? A growing body of criticism suggests that

1 Adam Smith, The Wealth of Nations (New York: Modern Library, 1937), pp. 64-68; David Ricardo, Principles of Political Economy and Taxation (Harmondsworth: Penguin, 1971), pp. 115-129. 2 See Karl Marx, Capital, 3 vols. (New York: International Publishers, 1967), 1: 535-542; Karl Marx, Theories of Surplus Value, Part I (Moscow: Progress Publishers, 1963), pp. 87-88; Karl Marx, Theories of Surplus Value, Part II (Moscow: Progress Publishers, 1968), pp. 395-404. Cf. Frederick Engels, "Preface," in Marx, Capital, 2: 17-18.

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he was not. This criticism is based on two principal arguments. The first is that it was inappropriate for Marx to subsume his theory of wages under his general theory of value because the competitive mechanisms which can be said to regulate the production of other commodities in conformity with the labor theory of value do not exist in the case of labor power. The second argument is that Marx was logically inconsistent in his treatment of the role of unpaid domestic labor (housework) in the determination of the value of labor power.

The implications of this body of criticism are significant. Nothing less than the formal structure of Marx's theory of exploitation is at issue. It is difficult to properly assess the validity and import of this criticism, though, because such an assessment requires a more detailed knowledge of the inner workings of Marx's theory of wages than the existing literature provides us.

Does the lack of a particular kind of competition among workers invalidate Marx's effort to construct a theory of wages based on the labor theory of value? How can we decide unless we know exactly what mechanisms he does identify as regulating the production and sale of labor power? Is Marx's treatment of housework in the determination of the value of labor power logically inconsistent? How can we decide unless we know exactly how he does deal with the issue? If either or both of these criticisms are valid, what is left of Marx's theory of wages and exploitation? How can we know in the absence of a clear and complete analysis of what Marx's theory of wages, in all its details, actually is? It is the purpose of this paper to at least partially fill the gap which the existing expository literature has left in this regard.

It is shown that Marx's theory of wages is far more complex than it is generally assumed to be. This complexity renders the theory quite flexible in the face of most logical and empirical criticism, but it also gives the theory a self-contradictory character which is hard to justify.

More specifically, it is shown that the theory assumes three



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distinct forms in the course of Marx's exposition of it. In his initial formulation, the theory constitutes a simple extension of the labor theory of value to the analysis of the wage contract. This is the form which Marx always ascribes to the theory. In organizing his exposition of the theory, however, Marx gives it a second form according to which the value of labor power depends upon its cost of production rather than its labor content. He says that this second form is equivalent to the first, but we shall see that it is logically quite distinct from it. As his exposition unfolds, though, it gradually becomes apparent that it is neither labor content nor cost of production which is given the ultimately controlling role in the valoriza- tion of labor power. Rather, it is the class struggle. It can thus be concluded that, in the final analysis, Marx developed a class-struggle theory of the value of labor power which he chose to call a labor theory while giving it the formal structure of a cost-of-production theory.

In the course of this analysis of Marx's theory of wages the two criticisms noted above are evaluated. This assessment shows that in its first and second forms Marx's theory is indeed vulnerable to one or both criticisms. In its third form, however, it is not. Hence Marx's theory of the value of labor power is presented as partially vindicated, though not in the terms in which he himself chose to formulate it.

Labor vs. Cost of Production in Marx's Theory of the Value of Labor Power

The point of departure for Marx's theory of the value of labor power was the classical school's treatment of the subject. While there were elements of the classical theory which Marx rejected, such as its reliance on population growth as a regu- lator of the price of labor, there were other elements for which he expressed a qualified acceptance. Such is the case



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with the classical school's definition of the value or natural price of labor.

The classical view was that the value of labor is determined by the cost of reproducing the laborer. As Ricardo expressed it, "the natural price of labor is that price which is necessary to enable the laborers, one with another, to subsist and to per- petuate their race, without either increase or diminution." This necessary price is determined by the cost of the laborer's subsistence. "The natural price of labor, therefore, depends on the price of the food, necessaries, and conveniences required for the support of the laborer and his family," with these subsistence requirements being defined as socially rather than biologically determined.3

Marx accepted the substance of this formulation, dissenting only from the terms in which it was expressed. Whereas the classical school perceived of it as a theory of the value of labor, Marx saw it as a theory of the value of labor power. The difference was more than nominal in his mind, since he felt his formulation permitted the theory to be articulated in conformity with the labor theory of value whereas the classical formulation contradicted it.

In articulating his version of the theory, however, Marx really creates two theories. The first is indeed a straightforward extension of the labor theory of value:

The value of labor power is determined, as in the case of every other commodity, by the labor time necessary for the production, and consequently also the reproduction, of this special article. So far as it has value, it represents no more than a definite quantity of the average labor of society incorporated in it.4

But what is the labor time necessary for the production of labor power? In answering this question Marx repeats the classical cost-of-production theory, claiming that it is equivalent to the above-formulated labor theory. He argues that

3 Ricardo, Principles, pp. 115, 118. 4 Marx, Capital, 1: 170-171.



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the labor time requisite for the production of labor reduces itself to that necessary for the production of [a laborer's] means of subsistence; in other words, the value of labor power is the value of the means of subsistence necessary for the maintenance of the laborer.5

These two formulations are not equivalent. Means of subsistence are, in effect, the means of production of labor power. They are repositories of dead - that is, indirect - labor. Before they can be transformed into the commodity labor power they must be productively consumed by the expenditure of a certain quantity of living or direct labor.

I am not here referring to labor spent producing means of subsistence in the home. I shall discuss that presently. What I am speaking of is the labor of productive consumption - getting dressed or dressing children in order to derive the benefit of clothing, stoking the furnace in order to derive the benefit of fuel, consuming a meal or feeding a baby in order to derive the benefit of food. All of this labor is necessary for the production of labor power, just as an expenditure of living labor is necessary to productively consume means of production in the fabrication of other commodities. To say that the value of labor power is equal to the value of a laborer's necessary means of subsistence would be equivalent to saying, in the case of another commodity, that its value is equal to the value of the means of production required for its creation with no allowance for the value conferred upon it by living or direct labor.

That Marx's second formulation is really a cost-of- production theory of the value of labor power becomes even clearer when we realize that even indirect labor is to be ig- nored unless it costs the laborer a monetary equivalent. Not all means of subsistence are purchased. Some are produced in the home. Does the value of labor power include an increment for this portion of the labor embodied in a worker's means of

5 Ibid., p. 171.



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subsistence? If workers usually purchase their clothes (or meals) ready made, then clearly the labor of tailoring (or cooking) would be included in that which, according to Marx, determines the value of labor power. But what if clothing (or meals) are usually produced at home either by the laborer or by members of the laborer's family? A consistent labor theory of the value of labor power would have to count all of this labor regardless of where it is performed and whether or how it is compensated.6

Criticism of this logical flaw in Marx's effort to subordinate his theory of wages to the labor theory of value is of recent vintage. It has emerged as an offshoot of debate over the question of how, within the framework of Marxian analysis, the position of women in capitalist society should be defined.

Benston opened the debate by arguing that household labor "remains in the pre-capitalist state," producing use values but not exchange values.7 Morton countered that such labor should not be regarded as merely producing use values but as also contributing to the "maintenance of and reproduction of labor power."8 It was Dalla Costa, though, who directly in- spired the subsequent literature on this topic by arguing that "within the wage, domestic work produces not merely use values, but is essential to the production of surplus value."9

6 "The process of production expires in the commodity. The fact that labor power was expended in its fabrication now appears as a material property of the commodity, as the property of possessing value. The magnitude of this value is measured by the amount of labor expended; the value of a commodity resolves itself into nothing else besides and is not composed of anything else. ... In this a commodity produced by a capitalist does not differ in any way from that produced by an independent laborer or by communities of working people or by slaves" (Marx, Capital, 2: 386).

"Although the form of labor as wage labor is decisive for the form of the entire process fof capitalist accumulation] and the specific mode of production itself, it is not wage labor which determines value. In the determination of value, it is a question of social labor time in general, the quantity of labor which society generally has at its disposal, and whose relative absorption by the various products determines, as it were, their respective social importance" (Marx, Capital, 3: 882).

7 Margaret Benston, "The Political Economy of Women's Liberation," Monthly Re- view 21 (September 1969): 13.

8 Peggy Morton, "A Woman's Work is Never Done," Leviathan, May 1970, p. 214. 9 Mariarose Dalla Costa, "Women and the Subversion of the Community," in



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Several efforts were subsequently made to define the role of unpaid domestic labor in the determination of the value of labor power and, consequently, in the production of surplus value.10

Seccombe argues that unpaid domestic labor does count in the determination of the value of labor power and that wages do include an increment equivalent to this contribution.11 His argument, though, does not survive close scrutiny. It derives the putative value-creating capacity of unpaid domestic labor from the cost of producing the labor power of the household workers, thus violating Marx's fundamental contention that the value-creating capacity of labor is greater than its cost of reproduction. Seccombe's only justification for his position is a reference to a passage in Marx's Theories of Surplus Value which he interprets as implying this. The passage in question says that the "value of the services" of unproductive household workers such as cooks and seamstresses is "determined in the same (or analogous) way as that of the productive laborers: that is by the production costs involved in maintaining or producing them."12 Seccombe interprets the "value of the services" of these workers as referring to the value embodied in the services they perform - that is, the value they create. Marx was clearly referring to the value of their labor power, though, not to their value-creating capacity. This is demonstrated by the internal logic of the passage, by its context, and by com- parison with a passage from Adam Smith which Marx cites as making the same point.

Mariarose Dalla Costa and Selma James, The Power of Women and the Subversion of the Community (Bristol, Eng.: Falling Wall Press, 1972), p. 31.

10 For a more detailed discussion of this literature, see Philip Harvey, "Marx's Theory of the Value and Price of Labor Power," unpublished Ph.D. dissertation, New School for Social Research, 1976, pp. 158-183.

11 Wally Seccombe, "The Housewife and Her Labor under Capitalism," New Left Review 83 (January- February 1973); Wally Seccombe, "Domestic Labor - A Reply," New Left Review 94 (November- December 1974).

12 Marx, Theories of Surplus Value, Part I, p. 159.



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Harrison also discusses this issue.13 He agrees with Sec- combe that unpaid domestic labor does count in the determination of the value of labor power, but he argues that wages do not include a corresponding value increment. In other words, his argument is that wages do not equal the value of labor power. This preserves Marx's formal definition of the value of labor power in terms of the labor theory of value, but it alters the meaning of the term "value" itself. It is no longer something which regulates prices but is merely an ac- counting term. Harrison's repudiation of the relationship between values and prices seems a high price to pay for maintaining the definitional purity of Marx's labor theory of the value of labor power.

Bullock,14 Gardiner, Himmelweit and Mackintosh,15 and Gintis and Bowles16 all conclude that the effort to save Marx's labor theory of the value of labor power is futile. They pro- pose to recognize that the value of labor power is not determined, like that of other commodities, by its labor content but is instead determined by the value of the commodities which a worker must purchase to reproduce his or her labor power.

This latter conclusion certainly seems warranted, but what has not been sufficiently emphasized is that, in practice, Marx took the same position - abandoning his labor theory of the value of labor power in favor of the classical school's cost-of- production theory. We shall see further confirmation of this below, when we note Marx's clear rejection of the notion that "free" labor performed in the home adds to the value of labor power.

13 John Harrison, "The Political Economy of Housework," Bulletin of the Conference of Socialist Economists 7 (Winter 1973).

14 Paul Bullock, "Defining Productive Labor for Capital," Bulletin of the Conference of Socialist Economists 9 (Autumn 1974).

15 Jean Gardiner, Susan Himmelweit, and Maureen Mackintosh, "Women's Domes- tic Labor," Bulletin of the Conference of Socialist Economists 11 (June 1975). 16 Herbert Gintis and Samuel Bowles, "Structure and Practice in the Labor Theory of Value," Review of Radical Political Economics 12 (Winter 1981).



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Determining the Value of Labor Power

Having thus reformulated his theory of the value of labor power in cost-of-production terms, Marx proceeds with his exposition. He begins by identifying three factors which he says must be taken into account in measuring the quantity of means of subsistence which can be deemed necessary for the reproduction of labor power.17 They are (1) the worker's own basic subsistence requirements, (2) the subsistence requirements of the worker's family, and (3) the costs of educating the worker. In his subsequent analysis he identifies two additional factors.18 These additional factors are (4) the length of the working day and (5) the intensity of labor. In addition to these five factors which determine the quantity of a worker's necessary means of subsistence, Marx identifies a sixth factor which affects the value of labor power by determining the value of those means of subsistence. This last factor is the productivity of labor.19

Let us consider what Marx says about each of these factors, focusing our attention on those issues which he himself stresses. First, what are the socioeconomic processes which condition each factor? Second, what developmental tendencies do these processes (and hence the factors they condition) exhibit over time as a result of the process of capitalist development? Finally, what is the consequent effect over time of each factor on the value of labor power? By addressing these questions we shall see what ultimately determines the value of labor power in Marx's analysis.

Basic Subsistence Requirements. The lower limit to the quantity of means of subsistence which a laborer requires is regulated, Marx says, by a "natural law." That is, it is determined by "the

17 Marx, Capital, 1: 171-172. 18 Ibid., pp. 524-527. 19 Ibid., p. 523.



314 SOCIAL RESEARCH

physical minimum of means of subsistence required by the laborer for the conversion of his labor power and for its reproduction."20

It is not this lower limit, however, which he identifies as determining a worker's necessary means of subsistence. Rather, the necessary minimum also reflects an "historical and moral element" which depends on "the degree of civilization of a country."21

What, though, determines the "degree of civilization" of a country, and what is the likely effect of the process of capitalist development in this regard? Marx says very little to indicate his views concerning these questions. He does ascribe a "civilizing influence" to capital in one of his unpublished notebooks,22 but in volume 1 of Capital he lays far greater stress on its dehumanizing tendencies.

Twentieth-century commentary on this point has focused on class struggle as the agent of change in an effort to explain the dramatic increase in customary subsistence expectations which has occurred in developed capitalist countries over the past hundred years.23 We shall see that this conclusion is well

20 Marx, Capital, 3: 859; cf. 1: 171. 21 Marx, Capital, 1: 171; cf. 3: 859. 22 The discussion in which this phrase is used makes the point that if the tendency

for capitalism to expand its wealth-creating capacity is not to permanently founder upon the rock of inadequate consumption, then "new needs" must be developed in society as the process of accumulation proceeds. "The discovery, creation and satis- faction of new needs arising from society itself; the cultivation of all the qualities of the social human being, production of the same in a form as rich as possible in needs, because rich in qualities and relations - production of this being as the most total and universal possible social product, for, in order to take gratification in a many-sided way, he must be capable of many pleasures [genussfdhig], hence cultured to a high degree - is likewise a condition of production founded on capital" (Marx, Grundrisse [Harmondsworth: Penguin, 19731, p. 409). Marx is silent, though, as to whether this expansion of culture need extend to the working class.

23 See Joan Robinson, An Essay on Marxian Economics (London: Macmillan, 1966), p. 30; Rudolph Schlesinger, Marx: His Time and Ours (New York: Kelley, 1950), pp. 115-116; Ernest Mandel, Marxist Economic Theory (New York: Monthly Review Press, 1970); 1: 147; Ronald Meek, Economics and Ideology (London: Chapman 8c Hall, 1967), pp. 118-119; Maurice Dobb, Theories of Value and Distribution (London: Cambridge University Press, 1973), pp. 152-153, 262; Arghiri Emmanuel, Unequal Exchange (New York: Monthly Review Press, 1972), pp. 115-116; Gintis and Bowles, "Structure and Practice," p. 19.



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grounded in Marx's overall analysis, but it should also be noted that Marx does not himself mention class struggle in this context. Why was he so reticent? As we proceed with our exposition, the reason will become clear.

The Worker's Family and the Value of Labor Power, In addition to the wage laborer's own subsistence requirements, Marx says that the subsistence needs of the wage laborer's children must be reflected in the value of labor power. Otherwise, labor power could not be reproduced as a commodity on a con- tinuing basis.24

This appears to be a straightforward qualification. Its simplicity is deceptive, though, for it is in reference to this qualification that the contradiction between Marx's two formulations of his theory of the value of labor power is most clearly revealed. This can be seen in his discussion of the effect on the value of labor power of changes in the degree to which women and children are employed as wage laborers.

Marx notes that such employment increases the monetary cost of maintaining a family by displacing "free labor at home."

Since certain family functions, such as nursing and suckling children, cannot be entirely suppressed, the mothers confiscated by capital, must try substitutes of some sort. Domestic work, such as sewing and mending, must be replaced by the purchase of ready-made articles. Hence, the diminished expenditure of labor in the house is accompanied by an increased expenditure of money.25

In keeping with the view that a change in the value of a worker's purchased means of subsistence constitutes a change in the value of labor power, Marx sees this increase in the cost of maintaining a family as tending to raise the value of labor power. On the other hand, he notes that a greater number of

24 Marx, Capital, 1: 172. 2*Ibid., p. 395; cf. p. 519.



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family members will now be working outside of the home to defray these costs. He says that this "spreads the value of the man's labor power over his whole family. It thus depreciates his labor power." Iji other words, the net effect of these two tendencies is to reduce the value of an individual's labor power, even though the total value of an entire family's labor power rises.

It should be noted that Marx makes no attempt to link this change in the value of labor power to changes in the amount of labor required to reproduce a worker's labor power.26 He reasons solely on the basis of changes in monetary costs borne by individual workers. As noted earlier, this is difficult to reconcile with a genuine labor theory of the value of labor power. It makes perfect sense, though, in the context of the cost-of-production theory which Marx in fact elaborated.

Marx's discussion at this point also provides a view of the role played by class struggle in his theory of the value of labor power. This can be seen in his analysis of the concrete determinants of the extent of women's and children's wage labor in modern capitalist society.

According to Marx, capitalists have an enduring interest in expanding the wage employment of women and children due to the negative effect that such employment has on both what he terms the absolute and the relative value of labor power.

The absolute value of labor power is Marx's more precise designation for what we have been calling simply the value of

26 It can be argued that an increase in the wage-labor-force participation of women and children would in fact be accompanied by a decrease in the amount of labor required for the reproduction of a single unit of labor power. This is because society's output of the commodity labor power would have increased (with the entry of more women and children into the labor market) while the labor inputs into the reproduction process remained unchanged or actually declined (either because less time was devoted to those family maintenance tasks which continue to be performed at home, or because factory-produced means of subsistence embody less labor than the home- made ones which they supplant). There is no comparable explanation, however, for the increase in the total value of a family's labor power which Marx also assumes to follow from an increase in the wage employment of women and children. Indeed, as noted above, the amount of labor required to reproduce a family's labor power would probably decline rather than increase.



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labor power. It is measured by a sum of money. We have seen that Marx argues that it will decline with an increase in the wage employment of women and children.

It is the decline in the commodity's relative value, though, which he describes as of most interest to capital. The relative value of labor power is Marx's term for the share of the total value product of labor which workers get to keep in the form of wages. It is thus expressed as a ratio rather than as an absolute sum. It can be defined as v/v+ s. It is more conven- ient, though, to think of it as the reciprocal of the rate of surplus value (s/v), since Marx uses the term mainly to focus attention on changes in the rate of surplus value or, as he also terms it, the rate of exploitation.

However the relative value of labor power is defined, any decrease in it will result in an increase in the rate of exploitation and in the rate of profit (s/c+ v). In contrast, a change in the absolute value of labor power tells us nothing about the rate of profit. We shall see, though, that a change in the absolute value of labor power is usually accompanied by a change in the commodity's relative value as well. Such is the case in this instance. While it costs capitalists less than it did before to purchase a unit of labor power, the value created by a unit of labor power remains the same. Hence, workers re- ceive a smaller share of their total value product, and the rate of exploitation (and with it the rate of profit) increases.27

This explains Marx's view of the capitalist class's collective interest in expanding the wage employment of women and children; but it doesn't explain why individual capitalists would perceive it as being in their personal interest to employ more women and children. The decline in the value of labor power upon which Marx bases his argument would be gradual and general rather than redounding to the immediate benefit of the capitalist who employs more women and children. It is not like the introduction of labor-saving technology which

27 Marx, Capital, 1: 395.



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immediately raises the profit rate of the innovating capitalist firm - unless we recognize that women and children are paid lower wages than men for doing the same work.

Curiously, Marx does not mention this latter consideration, even though it would have greatly strengthened and simplified his argument. Perhaps he felt it was so obvious that it did not need to be mentioned. It is also possible that the difficulty of explaining the lower wages paid women and children within the framework of either a labor or a cost-of- production theory of the value of labor power caused Marx to avoid the issue.

In any case, Marx clearly believed that capital would, if it could, enlist every member of the working-class family into the wage-labor army. But can it? What capital wants it does not necessarily get. It must first overcome whatever opposition the working class is able to muster.

It was Marx's view that working-class resistance in this area was fairly effective until the Industrial Revolution, even though changes in the labor process during the so-called manufacturing period strengthened capital's hand.

Although it [manufacture] adapts the detail operations to the various degrees of maturity, strength, and development of the living instruments of labor, thus conducing to exploitation of women and children, yet this tendency as a whole is wrecked on the habits and resistance of the male laborers.28

He reasons that the number of skilled workers required in the manufacturing process was still great enough that the relatively well organized, predominantly male, skilled artisans were able to exercise enough control over the labor process to effectively limit capital's prerogatives. Marx says that the introduction of machinery changes this.

It is they [machines] that sweep away the handicraftsman's work as the regulating principle of social production. Thus, on the

28 Ibid., p. 367.



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one hand, the technical reason for the lifelong annexation of the workman to a detail function is removed. On the other hand, the fetters that this same principle laid on the dominion of capital, fall away.29

The result, according to Marx, was a great expansion in the wage employment of women and children and a general breaking of working-class resistance.

By the excessive addition of women and children to the ranks of the workers, machinery at last breaks down the resistance which the male operatives in the manufacturing period continue to oppose to the despotism of capital.30

Marx did not, however, see capital's victory in this regard as a permanent one. He notes that a countertendency arose in the form of factory legislation designed to restrain capitalist excesses in this area. What is more, he says that such controls imposed on capital are "just as much the necessary product of modern industry as cotton yarn, self-actors, and the electric telegraph."31 This is not, however, because capital itself seeks such regulation. Rather, he says that it results from a "pro- tracted civil war, more or less dissembled, between the capitalist class and the working class."32

In other words, though the working class finds its traditional power broken by the Industrial Revolution, it is able to regroup. A resurgent movement based on new forms of organization grows "instinctively out of the conditions of production themselves"33 and just as instinctively struggles to limit capital's ability to freely determine the conditions of employment.

Did Marx feel that the working class would necessarily be successful in its efforts in this regard? The answer to that question is very illuminating. The fact is that Marx rarely

29 Ibid., p. 368. 30 Ibid., p. 402. 31 Ibid., p. 480. "ibid., p. 299. 33 Ibid., p. 301.



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attempted to predict the specific form which the class struggle would take in the future, and even less the probable outcome of specific episodes in that future struggle. Rather, he confines his comments either to general: assertions of the inevitability of the working class's ultimate victory or to retrospective analysis of already evidenced trends.

Marx speaks of factory legislation as a "necessary product of modern industry" not as a prediction but as a retrospective observation. He saw (1) that the working class was organizing itself, (2) that demands for the enactment of such legislation were typically among the first which the new working-class movement advanced, (3) that the working class was in fact prevailing over capital in the struggle for that legislation, and (4) that once factory legislation successfully limited capitalist excesses in the most powerful industrial sectors, the affected capitalists themselves began calling for the generalization of the legislation in the name of "equality in the conditions of competition," a trend which he saw further encouraged by "the constantly recurring experience that capital, so soon as it finds itself subject to legal control at one point," is able to "compensate itself all the more recklessly at other points."34

What, then, was Marx's view of the relationship between capitalist development and the extent of the employment of women and children as wage laborers, and consequently on the value of labor power? Certainly he saw capital as always trying to expand that employment and thereby reduce the value of labor power. It is also clear, though, that he acknowledged - indeed, took special note of the fact - that the working class could restrain this tendency. He was also clearly aware that the history of the class struggle in this area was marked by major changes in objective conditions which affected the relative strength of the two sides. Finally, he was cautious about predicting the future course which the struggle would take. Thus it would be inappropriate to say that Marx

34 Ibid., p. 490.



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saw the relationship between capitalist development and the extent of women's and children's wage employment as necessarily following any particular course beyond what already existing historical trends promised for the immediate future. It would depend upon the subsequent course of the class struggle, the details of which could not be foreseen.

These observations should enlighten us concerning Marx's previously noted reticence on the subject of the relationship between the process of capitalist development and changes in the working class's customary subsistence requirements. To the degree that those changes also depend upon the form and progress of the class struggle, as I have said most commen- tators believe, then it would have been uncharacteristic of Marx to try to predict their future course. The fact that he mentions neither the class struggle nor any other force clearly associated with the process of capitalist development as affecting customary subsistence requirements suggests that he saw no inherent tendencies emanating from the accumulation process itself in this area, and that as of 1867 he had not yet seen what if any effect working-class organizing efforts might have. If Capital had been written in the twentieth century we would, of course, be justified in expecting more from Marx on this point. We would not be justified, however, in expecting more than he provides in his analysis of the struggle over the extent of women's and children's wage employment- namely, an historical as opposed to a predictive analysis.

The Costs of Education. The third factor which Marx mentions as entering into the determination of the value of labor power is the cost of developing the skills manifest in a particular labor power.35 This cost varies according to the complexity of the skills which must be learned, being "excessively small in the case of ordinary labor power"36 and possibly very great in

35 Ibid., pp. 172, 519. 36 Ibid. , p. 172.



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the case of highly skilled labor power. Hence the value of a specific type of labor power will vary according to its particular costs of reproduction.

Here again we encounter logical problems arising from Marx's dual formulation of his theory. Is all labor expended in the acquisition of a skill to be counted as adding to the value of labor power, or only that which costs the worker a monetary equivalent? Once again Marx reasons on the basis of the latter assumption, speaking of the "costs" and "expenses" of education rather than its labor content.37

Marx says relatively little about the prospects for change in average educational costs attendant upon the development of capitalism. Moreover, what little he does say has divided implications for the value of labor power. On the one hand, he felt that the extension of both the division of labor and the use of machinery in the production process would diminish the average level of skill required of most wage laborers and thereby cause the value of labor power to fall.38 On the other hand, he cites an exception to this tendency "whenever the decomposi- tion of the labor process begets new and comprehensive functions."39 He also notes that the constantly changing technical base of modern industry provides the foundation for a more extensive development of the individual worker's varied ca-

37 For a mathematical model defining the value of skilled labor power alternatively in terms of its labor content and its cost of production, see Philip Harvey, "The Value Creating Capacity of Skilled Labor in Marxian Economics," Review of Radical Political Economics, forthcoming.

38 See Marx, Capital, 1: 349-350, 420-422, 484. On p. 350, Marx indicates that both the absolute and the relative value of labor power will decline with a reduction in the average skill required of workers. This assumes, however, that the rate of surplus value is greater for unskilled than for skilled labor. At other points in his work, Marx argues that the rate of surplus value is the same for skilled and unskilled labor (Capital, 3: 142). Marx's view of the effect of a general "deskilling" of the working class upon the relative value of labor power is -therefore open to question. At issue is the relationship, on the one hand, between the different values of skilled and simple labor power and, on the other hand, between the different value-creating capacities, of skilled and simple labor. On this, see Harvey, "Marx's Theory of the Value and Price of Labor Power" and "The Value Creating Capacity of Skilled Labor in Marxian Economics."

39 Marx, Capital, 1: 350.



MARX'S THEORY 323

paci ties due to the "variation of labor, fluency of function, [and] universal mobility" which it requires.40 This would mean a general heightening of the educational level required of workers and presumably also of the educational costs required to reproduce their labor power. He goes on to say, however, that this latter tendency is not naturally manifest under capitalism because capital finds "the old division of labor with its ossified particularizations" more profitable. Still, he refers to the spontaneous efforts of the working class in establishing their own schools and to the educational provisions of the Factory Act ("that first and meager concession wrung from capital") as first steps toward fulfilling the promise of ex- panded individual development lying dormant in modern industry.41 He says that this tendency will come to fruition only with the final victory of the working class over capital, but how many more concessions might be won from capital toward this end in the interim, thus raising the educational costs normally required for the reproduction of labor power?

Once again we are in a realm where the uncertain course of the class struggle must be seen as the ultimately decisive factor in Marx's account of the determination of the value of labor power. The level of skill required of workers in the execution of their fragmented tasks may continue to diminish with capitalist development, but there are also economic forces which support and encourage the working class to fight for the right to be educated, thus raising the value of its labor power. Within the framework of Marx's analysis, the class struggle must be seen as determining which tendency will prevail.

The Length of the Working Day. Since Marx regarded the value of labor power as being determined by its reproduction costs, he reasoned that a change in the length of the working day could affect the value of labor power only insofar as it affected

40 Ibid., p. 487. 41 Ibid., p. 488.



324 SOCIAL RESEARCH

those reproduction costs. He argued that changes in the length of the working day did have such an effect due to consequent changes in the amount of "wear and tear" experi- enced by workers in the labor process.42

If a lengthening of the working day causes the value of labor power to go up, though, why would capitalists seek it? According to Marx, the reason is because a longer working day provides a more-than-compensating decrease in the relative value of labor power. In other words, a lengthening of the working day may raise the absolute value of labor power but only slightly. Most of the increased labor time will be spent producing additional surplus value, thus raising both the rate of exploitation and the rate of profit.43

But what determines the length of the working day? Is its length somehow dictated by the so-called laws of commodity exchange, or are other forces operative? Marx's answer is that the laws of equivalent exchange imply only very broad and indefinite limits for the maximum and minimum lengths of the working day. Within those limits, its length is determined by the class struggle.

He says that the working day must be longer than what is required for the production of the equivalent of the worker's necessary means of subsistence, but how much longer is inde- terminate. On the other hand, it must be short enough for the worker to attend to his own physical and moral needs, "the extent and number of which are conditioned by the general state of social advancement."44 He thus concludes:

Apart from extremely elastic bounds, the nature of the exchange of commodities itself imposes no limit to the working day, no limit to surplus labor. The capitalist maintains his rights as a purchaser when he tries to make the working day as long as possible. . . . On the other hand, the peculiar nature of the commodity sold implies a limit to its consumption by the purchaser, and the laborer maintains his right as seller when he 42 Ibid., p. 526. 43 Ibid., pp. 526-527. 44 Ibid., p. 232.



MARX'S THEORY 325

wishes to reduce the working day to one of definite normal duration. There is here, therefore, an antinomy, right against right, both equally bearing the seal of the law of exchanges. Between equal rights force decides. Hence is it that in the history of capitalist production, the determination of what is a working day, presents itself as the result of a struggle, a struggle between collective capital, i.e., the class of capitalists, and collective labor, i.e., the working class.45

There follows a detailed analysis of the history of this class struggle. Marx notes that it took literally centuries for capital to gain absolute control over the length of the working day, a victory which was completed only with the advent of modern industry. He cites two reasons why the Industrial Revolution constituted a turning point in this regard. We have already noted the first of these in his discussion of capital's use of women's and children's labor to break the power of the skilled-artisan class.46 The second reason is that the advent of machine production increases the incentive for capitalists to prolong the working day. This is so, he says, because "the development of the factory system fixes a constantly increasing portion of the capital in a form [machinery and buildings] in which ... it loses both use value and exchange value whenever it loses contact with living labor."47 He notes that this incentive is particularly strong when the factory system is first introduced into an industry, since improvements in machinery proceed most rapidly then, thus enhancing the promise of greater-than-normal profits for those who innovate as well as the threat of rapid obsolescence for those who do not. Later on, the need to compensate for the negative effect upon the rate of profit attributable to a rising organic composition of capital provides an additional spur to capital's efforts to raise the rate of surplus value through a lengthening of the working day.48

45 Ibid., pp. 234-235. 46 Ibid., pp. 367-368, 402-403. "'Ibid., p. 405. wIbid., pp. 406-407.



326 SOCIAL RESEARCH

It is interesting to note that Marx attributes a tendency to capital to extend the working day beyond all bounds even though it is not in the interest of the class as a whole. Individ- ual capitalists, he says, see only an excess of population relative to their requirements for labor. Hence they will see no need to shorten the working day in order to protect the quantity and quality of the supply of labor power available to them. A degradation of the health of the working class and of the quality of labor power may follow.49

The only thing that can stem this tide, Marx says, is the organized resistance of the workers as a class.50 As noted above, he saw this resistance as just as much a necessary and spontaneous product of capitalist development as the capitalist class's own tendencies. He catalogues the provisions of the factory acts as the working class's first small victories in this area following their rout in the Industrial Revolution. In characteristic fashion, though, he makes few predictions regarding the future course of the struggle.

Thus we once again see that, behind his iteration of a series of seemingly definitive material determinants of the reproduction costs of labor power, Marx undertakes a secondary analysis in which the class struggle appears as the ultimately decisive determinant of that commodity's value.

The Intensity of Labor. For Marx, the intensity of labor is a measure of the amount of labor contained in a given length of time, more-intense labor being portrayed by him as a "con-

49 Ibid., pp. 266-270. 50 "The history of the regulation of the working day in certain branches of produc-

tion, and the struggle still going on in others in regard to this regulation, prove conclusively that the isolated laborer, the laborer as 'free' vendor of his labor power, when capitalist production has once attained a certain stage, succumbs without any power of resistance" (Marx, Capital, 1: 299). "For 'protection' against 'the serpent of their agonies,' the laborers must put their heads together, and, as a class, compel the

passing of a law, an all powerful social barrier that shall prevent the very workers from selling, by voluntary contract with capital, themselves and their families into

slavery and death" (ibid., p. 302).



MARX'S THEORY 327

densed" expenditure of less-intense labor.51 When he says that the magnitude of a commodity's value is determined by the labor time required for its production, he means a normalized labor time in terms of which an hour of more-intense labor counts as a more lengthy expenditure of less-intense labor. Hence, even though an increase in the intensity of labor means that each individual commodity will require less time to produce than before, Marx maintains that "each article costs the same labor as before."52 In other words, variations in the intensity of labor have no effect upon the value of a given mass of commodities such as a laborer's necessary means of subsistence.

This means that, for Marx, variations in the intensity of labor are similar to the other factors we have discussed in that they can affect the value of labor power only by means of their impact on the quantity (as opposed to the value) of the commodities comprising a laborer's necessary means of subsistence. Like variations in the length of the working day, he says that changes in the intensity of labor do have such an effect as a result of their impact on the "wear and tear" of labor power.53

There is still another parallel that can be drawn between variations in the length of the working day and in the intensity of labor. It is that their effect upon the relative value of labor power is likely to be much more pronounced than their effect upon its absolute value. This is because an increase in the intensity of labor will cause an immediate corresponding increase in the total sum of value produced in a working day of given length, while the effect of the heightened intensity of labor upon the absolute value of labor power is more tenuous. The rate of surplus value can therefore be immediately and dramatically heightened by an increase in the intensity of

51 Marx, Capital, 1: 410, 524. *2Ibid., p. 524. 53 Ibid., pp. 524-525.



328 SOCIAL RESEARCH

labor, and this result can be gained by individual capitalists whether or not the capitalist class as a whole is in a position to achieve it.

Not surprisingly, Marx portrays the intensification of labor as another enduring objective of capital. We have seen, however, that wanting and having are not the same thing in his analysis, so we must ask whether he portrays the process of capitalist development as including tendencies which either help or hinder the capitalist class in realizing its goals in this area.

Marx is very clear on this point. He says: "It is self-evident, that in proportion as the use of machinery spreads, and the experience of a special class of workmen habituated to machinery accumulates, the rapidity and intensity of labor increases as a natural consequence."54 The reason he can say this with such assurance, of course, is because he has already explained at great length how modern industry breaks the back of working-class resistance to the dominion of capital over the labor process.

Moreover, in contrast to his discussion of the struggle over the length of the working day, Marx does not portray rising working-class resistance as an effective deterrent to this tendency. Indeed, he says that the very success of the working class in its struggle to shorten the working day only permits capital to further increase the intensity of labor. This occurs as it is discovered that a shortened working day accommodates an often- more- than-compensating (to capital) speed-up in the labor process.

In other words, Marx believed that the working class could achieve considerable success in some areas of the class struggle, but he did not believe such success was equally easy to achieve on all fronts. The only defense which he suggested that the working class could raise against capital's tendency to increase the intensity of labor was to force a further shorten-

54 Ibid., p. 409.



MARX'S THEORY 329

ing of the working day.55 Beyond this hint of pessimism, though, he did not deviate from his general practice of not predicting what course the class struggle would take.

The Productivity of Labor. All of the factors we have thus far noted in Marx's analysis of the determination of the value of labor power are alike in that they affect only the quantity of means of subsistence necessary for the reproduction of labor power. The productivity of labor, on the other hand, is described by Marx as affecting only the value of that given quantity of means of subsistence. As he says, "The value of labor power is determined by the value of a given quantity of necessaries. It is the value and not the mass of these necessaries that varies with the productiveness of labor."56

He reasons that if a change in the productivity of labor affects an industry which produces means of subsistence, then the amount of labor required for the production of a worker's necessary means of subsistence will vary and, with it, their value. The relationship between the productivity of labor and the value of labor power is described as an inverse one. The greater the productivity of labor, the less will be the amount of labor embodied in a worker's means of subsistence, the less will be the value of those means of subsistence, and hence the less will be the absolute value of labor power. The relative value of labor power will also decrease, since that part of the working day available for the production of surplus value will increase. If a change in the productivity of labor does not extend to industries producing means of subsistence, or to industries producing means of production for them, then there will be no change in either the absolute or relative value of labor power.57

Marx notes that a change in the productivity of labor may

55 Ibid., p. 417. 56 Ibid., p. 523. 57 Ibid., pp. 312-321, 520-525.



330 SOCIAL RESEARCH

stem from any one of a number of factors.58 In tracing the effect of the process of capitalist development in this area, though, he focuses his analysis upon capital's tendency to revolutionize the labor process through the development of improved means of production. He concludes that "there is immanent in capital an inclination and constant tendency, to heighten the productiveness of labor, in order to cheapen commodities, and by such cheapening to cheapen the laborer himself."59

It is not this reduction in the value of labor power, however, which he describes as the innovating capitalist's immediate objective. He observes that "whenever an individual capitalist cheapens shirts, for instance, by increasing the productiveness of labor, he by' no means necessarily aims at reducing the value of labor power." Rather, the capitalist is motivated by the knowledge that a reduction in unit costs will increase profits whether or not wage rates fall. It is only the "coercive laws of competition" which, according to Marx, cause this individual action to be generalized and therefore eventually cause a decline in the value of labor power.60

Marx says virtually nothing about the role of working-class resistance in all this. Since he portrayed changes in labor productivity as mainly stemming from the introduction of improved means of production, something over which capital exercises virtually absolute control, we can safely conclude that Marx did not see this as an area in which the working class was likely to gain much influence. Certainly it had not at the time he wrote, and, as I have emphasized, Marx was consistently silent with regard to the class struggle's prospects where no clear trends were already in evidence.

We have noted six determinants of the value of labor power in Marx's analysis. Within the framework of his theory, the

58 Ibid., p. 40. 59 Ibid., p. 319. 60 Ibid., p. 316.



MARX'S THEORY 331

value of labor power will vary with any of these six factors. Further, we have seen that Marx not only perceived these factors as possibly variable but that he saw the process of capitalist development as necessarily including tendencies which will cause them to vary. These variations are not portrayed as being predictable, however, because they are ultimately dependent upon the uncertain course of the class struggle. Thus it is really the class struggle which ultimately determines the value of labor power in Marx's analysis.

More specifically, Marx identified certain tendencies emanating from the process of capitalist development which would cause capital to act in such a way as to lessen the value of labor power. On the other hand, he identified the organized opposition of the working class as a necessary counteracting force. He carefully noted the progress and conse- quences of this struggle up to the time he was writing, but the struggle's future course and its resultant future influence on the value of labor power were, so far as he was concerned, an unwritable book.

Much is made of the inexorable quality of the process of capitalist development in Marx's view. So far as the value of labor power is concerned, however, it is not any specific tendency for the magnitude of that commodity's value to increase or decrease which is presented by Marx as inexorable. Rather, it is the steady development of a contradictory opposition between capital's inherently negative influence on wage levels and the working class's own reflexive assertion of its contrary aspirations. That the effect of this opposition upon the value of labor power may be different during different eras of the capitalist age and in different parts of the capitalist world would seem to be entirely consistent with the theory.

In Table 1, Marx's analysis of the determination of the value of labor power is summarized. The six factors which he identifies as entering into the determination of the value of labor power are listed in column 1. In column 2 it is noted that the productivity of labor is unique among these factors insofar as



332 SOCIAL RESEARCH

Table I The Immediate Determinants of the Value of Labor Power and the Conditions

Which They Reflect

COLUMN 1 COLUMN 2 COLUMN 3

The Determinants How the Value The Socioeconomic

of the Value of of Labor Power Conditions Reflected Labor Power Is Affected by Each Determinant

The necessary subsistence Affects the quantity of a Physical requirements and requirements of the laborer's necessary means historically determined working-class of subsistence "moral" standards The costs of family main- Affects the quantity of a Family structure and the tenance laborer's necessary means extent of the employment

of subsistence of women and children as laborers

The costs of education Affects the quantity of a The general level and va- laborer's necessary means riety of skills required of of subsistence wage laborers

The length of the working Affects the quantity of a The strength of the day laborer's necessary means working class as reflected

of subsistence in either legal or customary restraints on the length of the working day

The intensity of labor Affects the quantity of a The nature of the labor laborer's necessary means process and the length of of subsistence the working day

The productivity of labor Affects the value of the The state of technology, commodities comprising the availability of ma- the means of subsistence chinery, the fertility of the

soil, etc.

it is the only one which affects the value as opposed to the

quantity of commodities comprising a laborer's necessary means of subsistence. In column 3 the socioeconomic conditions which Marx identifies as underlying the six factors are identified.

In Table 2, columns 4 through 6 summarize capital's influence on the value of labor power. In column 4 are listed those

developmental tendencies associated with each of the six factors which, according to Marx, emanate from capital. In other

words, these are the tendencies which he says will be manifest in a developing capitalist economy whenever and wherever the



MARX'S THEORY 333

Table 2 The Effect of the Process of Capitalist Development Upon the

Value of Labor Power*


Effect upon Effect Upon Tendencies ¿he Absolute the Relative

Attributable to Magnitude of the Magnitude of the Capitalist Value of Value of

Development Labor Power Labor Power

Uncertain regarding sub- Uncertain Uncertain sistence requirements of the workers

Increasing employment of Lessens the value of labor Lessens the relative value women and children as power of labor power wage-laborers

Diminishing average level Lessens the value of labor No effect of skill among workers power

Lenghthening average Increases the value of labor Lessens the relative value working day power (probably a weak of labor power (a strong

effect) effect)

Increasing intensity of Increases the value of labor Lessens the relative value labor power (probably a weak of labor power (a strong

effect) effect)

Increasing productivity of Lessens the value of labor Lessens the relative value labor power of labor power

* Ignoring the influence of working-class organizations.

capitalist class is free of legal and/or customary restraints. In columns 5 and 6 it is noted that the effect of these tendencies is generally to lessen the absolute value of labor power, and even more decisively to lessen its relative value.

In Table 3, columns 7 through 9 summarize Marx's account of the English working class's achievements in counteracting the tendencies noted in the preceding three columns. The mixed fruit of that struggle is noted in column 7, and its equally mixed effect upon the absolute and relative value of labor power is noted in the last two columns. It is important to remember, however, that Marx does not suggest that these tendencies are immutable, nor that they exhaust the pos- sibilities for working-class success.



334 SOCIAL RESEARCH

Table 3 The Role of Working-Class Movements in Determining the

Value of Labor Power*


Tendencies Effect upon the Effect upon the Attributable to Absolute Magnitude Relative Magnitude the English of the Value of of the Value of

Working Class Labor Power Labor Power

No effect upon customary None noted None noted subsistence requirements noted

Achieved a limitation on Tended to increase its ab- Tended to increase its rel- the wage-employment of solute magnitude ative magnitude women and children

Incipient tendency for the Tended to increase its ab- Tended to increase its rel- working class to win access solute magnitude ative magnitude (assum- to more education ing added education not

required by the labor process)

Achieved a shortening of Tended to lessen its abso- Tended to increase its rel- the working day lute magnitude (probably ative magnitude (a strong

a very weak effect) effect but counteracted by the increasing intensity of labor)

Permitted an increase in Tended to increase its ab- Tended to lessen its rela- the intensity of labor by solute magnitude (proba- tive magnitude (a strong shortening the working bly a weak effect) effect but counteracted by day the shortening of the

working day) No effect upon the pro- None noted None noted ductiveness of labor noted

* Marx's account of the progress achieved by the English working-class in this area prior to 1867.

It should also be noted that, given the ultimately decisive role played by the class struggle in Marx's theory of the value of labor power, his insistence on formulating his analysis in terms of the labor content and/or cost of production of labor

power makes for a very circuitous argument. He could have more simply said that the value of labor power is directly determined by the class struggle and then proceeded with his

analysis of that struggle. His iteration of the six factors affect-



MARX'S THEORY 335

ing the value of labor power would still be useful, but as a framework for analyzing the class struggle rather than as a list of supposedly objective determinants of the quantity and value of a worker's necessary means of subsistence. Of course, the reason Marx did not formulate his theory in these terms is because of his overriding commitment to the labor theory of value. We shall presently see, however, that even he found that commitment unduly confining at some points in his analysis.

Is the Wage Contract an Exchange of Equivalents?

In Parts VI and VII of the first volume of Capital, Marx undertakes a more detailed discussion of the wage contract. He begins by observing that when a worker takes a job it appears to be an exchange of labor for an equivalent value.61 He then attempts to demonstrate analytically that this is not the case. What is purchased is not living labor, he says, but merely the capacity to perform labor, which he calls labor power. For this, though, an equivalent value is indeed paid in accord with the principles of the labor theory of value. This, he says, is the true "essence" of the wage contract, in contrast to its "phenomenal form."62

61 Ibid., p. 535. 62 "With respect to the phenomenal form, 'value and price of labor,' or 'wages,' as

contrasted with the essential relation manifested therein, viz., the value and price of labor power, the same difference holds that holds in respect to all phenomena and their hidden substratum. The former appear directly and spontaneously as current modes of thought; the latter must first be discovered by science" (Marx, Capital, 1: 542). In explanation of the language used in this passage it should be remembered that Marx viewed reality as being contradictory in character. The "outward appearance" of an economic phenomenon is typically portrayed by him as being not only distinct from its internal dynamic but as positively contradicting that hidden "essence." For example, the real basis of the value relationship which exists between commodities is described by him as being obscured by its appearance in "the fantastic form of a relation between things" {ibid., p. 72). Similarly, he says that when surplus value is "disguised as profit" it "actually denies its origin, loses its character, and becomes unrecognizable" {Capital, 3: 167). It is the task of scientific inquiry, he

thought, to reveal the hidden "essence" of directly perceived phenomena and thereby



336 SOCIAL RESEARCH

Marx does not let the matter rest, though, with this argument. Several chapters later he returns to the topic and proceeds to describe a second level of contradiction between the realms of appearance and reality in the labor market.63 This time, though, it is his earlier characterization of the wage contract as an exchange of equivalents which is described as lacking genuine reality. This second contradiction is revealed, he says, when capitalism is viewed as a system of continuous social reproduction rather than as a series of discrete acts of

commodity production and exchange.

The exchange of equivalents, the original operation with which we started, has now become turned round in such a way that there is only an apparent exchange. This is owing to the fact, first, that the capital which is exchanged for labor power is itself but a portion of the product of others' labor appropriated without an equivalent; and, secondly, that this capital must not only be replaced by its producer, but replaced together with an added surplus. The relation of exchange subsisting between capitalist and laborer becomes a mere form; what really takes place is this - the capitalist again and again appropriates, without equivalent, a portion of the previously materialized labor of others, and exchanges it for a greater quantity of living labor. 64

What are we to make of this? What had previously been portrayed as the "essence" of the wage contract is now described as a mere appearance. What was Marx's view of the wage contract? Did he see it as an exchange of equivalents bearing the stamp of the labor theory of value, or did he see it as a nonequivalent exchange with reference to which the labor theory of value has no clear relevance?

Apparently, Marx was made aware of the confusion in which these comments might leave his readers, for in the French edition of Capital (published in the early 1870s) he

overcome the illusions of the world of appearances. "All science would be superflu- ous," he says, "if the outward appearance and the inner essence of things directly coincide" {ibid., p. 817).

63 Marx, Capital, 1: 579-584. 64 Ibid., p. 583; emphasis added.



MARX'S THEORY 337

added a long passage at this point reaffirming the validity of his original analysis.65 The point of this passage is that the state of affairs which he portrays as contradicting the laws of commodity exchange arises only from the operation of those laws. Capitalist production, he says, is achieved only by means of a series of discrete acts, each of which, considered by itself, will tend to be carried on in strict compliance with the laws of equivalent exchange. The connections between these discrete acts, however, cause the laws of equivalent exchange to be "turned on their heads."

Does this really settle the question? Dialectician that he was, Marx had no difficulty subscribing to a theoretical formulation which says that something is both "A" and "not A" at the same time. The wage contract both is and is not an exchange of equivalents. But which is the more accurate or fruitful way to characterize it for purposes of analyzing the capitalist mode of production? Marx would surely have said that it is a mistake to adopt either characterization to the exclusion of the other. Is this a valid use of dialectics, though, or was Marx simply using a dialectical argument to accommodate the logical contradic- tions arising from his divided theoretical commitments - to the labor theory of value, on the one hand, and to class analysis, on the other?

How Does Labor Power Become a Commodity?

Another place where we see Marx's reluctance to confine his analysis within the framework of the so-called laws of equivalent exchange is in his account of how labor power becomes a commodity.

In ordinary parlance a commodity is anything which is regularly bought and sold. According to this definition of the term, labor power automatically becomes a commodity

65 Ibid., pp. 584-587. Cf. Engels, "Preface," in Marx, Capital 1: 26.



338 SOCIAL RESEARCH

whenever it is regularly exchanged for a wage, and all that needs to be explained are the circumstances which give rise to this occurrence. Viewed in these terms, Marx's explanation of how labor power becomes a commodity is perfectly clear.

He says that only two conditions need be satisfied. These conditions are embodied in the concept of "free labor" which he finds so ironic. A laborer must be "free," he says, "in the double sense, that as a free man he can dispose of his labor power as his own commodity, and that on the other hand he has no other commodity for sale, is short of everything necessary for the realization of his labor power."66 In other words, labor power comes to be offered for sale on a regular basis because the working class has no other choice. Legally eman- cipated but economically dependent, workers must sell their labor power or go hungry.

Marx attributes the origin of this state of affairs to the process of primitive accumulation which he describes in Part VIII of the first volume of Capital. "Freedmen became sellers of themselves," he says, "only after they had been robbed of all their own means of production, and of all the guarantees of existence afforded by the old feudal arrangements."67

Once the capitalist mode of production has been estab- lished, the continued appearance of labor power in the market is assured by the ongoing reproduction of the working class in an essentially propertyless state. As in his discussion of primitive accumulation, it is the nonvoluntary, coercive character of the process which he stresses:

Capitalist production, therefore, of itself reproduces the sep- aration between labor power and the means of labor. It thereby reproduces and perpetuates the condition for exploiting the laborer. It incessantly forces him to sell his labor power in order to live, and enables the capitalist to purchase labor power in order that he may enrich himself. It is no longer a mere acci- dent that capitalist and laborer confront each other in the

66 Marx, Capital, 1: 169. 67 Ibid., p. 715.



MARX'S THEORY 339

market as buyer and seller. It is the process itself that incessantly hurls back the laborer on to the market as a vendor of his labor power, and that incessantly converts his own product into a means by which another man can purchase him. In reality, the laborer belongs to capital before he has sold himself to capital. 68

What needs to be noted here is that Marx once again es- chews explanations rooted in the laws of equivalent exchange in favor of those based on an analysis of the class struggle. This need not have been the case. He could have described the behavior of workers in offering their labor power for sale as a calculated economic initiative, similar in all key respects to the behavior of other commodity producers in bringing their products to market. Such a line of reasoning would have permitted an argument to be made that the production and sale of labor power is regulated in essentially the same way as is the production and sale of other commodities.

The fact that he avoids this line of reasoning therefore raises another question. If the production and sale of labor power is not regulated in the same way as the production and sale of other commodities, then how is it regulated? What justifies Marx's assumption that the price of labor power will in fact be regulated by its value? Put differently, what justifies his designation of labor power as a commodity in the more restricted sense of the term which Marxists have generally adopted - that is, as an item of commerce whose exchange comes under the purview of the labor theory of value?69

88 Ibid., p. 577; emphasis added. See also pp. 573-574, where Marx refers to the wage contract as a "fictio juris" (legal fiction) in this context.

69 It is readily acknowledged by Marxists that the prices paid for some objects of commerce - such as virgin land, or nonreproduceable works of art - are determined by factors other than those embodied in the labor theory of value (see Marx, Capital, 3: 633, 647-648). To emphasize the special character of those objects of commerce whose value they believe is determined in accord with the principles of the labor theory of value, Marxists often confine the designation "commodity" to reproduceable products of human labor which are the object of a regularized exchange. Whether it is also necessary to the definition of the term that the producers be either private individuals or privately owned enterprises has been a matter of some controversy insofar as it affects the categorization of production under socialist conditions. For a discussion of the issues involved in this controversy, see Meek, Economics and Ideology,



340 SOCIAL RESEARCH

This is the issue raised in the older of the two principal lines of criticism to which Marx's theory of the value of labor power has been subject.70 Bortkiewicz was the first to call attention to this issue. He argues that it is illegitimate to regard the value of labor power as being determined in the same way as the value of other commodities, since Marx's general theory of value, "insofar as its validity can be assumed, is based on competition between producers, of which there can be no question for the commodity labor power."71

The competition to which Bortkiewicz refers is that which allows for the mobility of economic resources between industries in response to the goal of profit maximization (for capitalists) or income maximization (for independent commodity producers). Without such an adjustment mechanism, no equilibration of relative prices in accord with the principles of the labor theory of value will occur. According to Marx, though, it is a primary characteristic of labor power that its producers cannot choose to produce something else. Hence, if the price of labor power deviates from its value there is no obvious mechanism whereby the commodity's supply will automatically adjust to eliminate the deviation.

Subsequent commentary on this issue has mainly focused on the question of whether a mechanism can be identified in Marx's analysis which can be seen as ensuring that wages will not rise high enough to eliminate profits. Lange,72 Sweezy,73 and Meek74 all take the position that the capitalist accumula-

pp. 256-284. For the authority in Marx's work for limiting the term's use, see Capital, 1: 40-41, 72-73. Occasionally, however, Marx himself uses the term in its ordinary rather than its restricted sense {Capital, 3: 624, 629).

70 For a more detailed discussion of this literature, see Harvey, "Marx's Theory of Value and the Price of Labor Power," pp. 133-157.

71 Ladislaus von Bortkiewicz, "Value and Price in the Marxian System," International Economic Papers 2 (1952): 57.

72 Oscar Lange, "Marxian Economics and Modern Economic Theory," Review of Economic Studies 2 (June 1935): 198-199.

73 Paul Sweezy, The Theory of Capitalist Development (New York: Monthly Review Press, 1968), pp. 84-87.

74 Ronald Meek, Studies in the Labor Theory of Value (London: Lawrence & Wishart, 1973), pp. 185-186.



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tion process, through its regulation of the expansion and con- traction of the reserve army of labor, does indeed ensure this. Schumpeter75 and Wolfson76 feel that this evades the problem of providing a "static equilibrium theory of the value of labor power compatible with profit."77

Only Gintis and Bowles follow Bortkiewicz's lead in going beyond the issue of whether the theory guarantees a positive rate of profit.78 Indeed, they see the theory's real weakness as its inability to guarantee a positive wage rate. Specifically, they argue that the logic of the labor theory of value cannot, by itself, provide an adequate explanation of (1) why the supply of labor power is always in surplus rather than experiencing alternating periods of surplus and shortage as with other commodities, (2) why wages are not reduced to zero by the existence of this permanent surplus in the labor market, and (3) why labor power continues to be produced in spite of the fact that the parents who are responsible for the decision to produce it have no claim on the income derived from the commodity's ultimate sale and, hence, have no clear economic motive for their production decisions.

Is Marx's theory of the value of labor power in fact deficient in regard to the issues raised in this body of criticism? As a labor or cost-of-production theory it indeed is, for precisely the reasons cited above. We have seen, though, that Marx's subordination of his theory of wages to this formal structure is by no means complete. Is this another instance where he relies upon class analysis in his exposition instead of the so-called law of value? The answer is yes.

Marx describes the price of labor power as subject to the forces of supply and demand just like other commodities. Moreover, the factors which he identifies as underlying

75 Joseph Schumpeter, History of Economic Analysis (New York: Oxford University Press, 1954), p. 650.

76 Murray Wolfson, A Reappraisal of Marxian Economics (New York: Columbia Uni- versity Press, 1966), pp. 110-113.

77 Ibid., p. 113. 78 Gintis and Bowles, "Structure and Practice."



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changes in the demand for labor power - that is, the rate of accumulation and changes in the technical composition of capital - are the same ones which appear in his reproduction schemata as underlying changes in the demand for commodities in general. Where Marx saw labor power as unique among commodities is in the determination of its supply.

The supply of labor power is not, in his view, determined by the rational - that is, profit or income maximizing - economic decisions of its producers. Indeed, Marx goes out of his way to discount the importance of population growth for the supply of labor power, in keeping with his criticism of the classical school's reliance on demographics in its own theory of wages.79 Instead, he saw the supply of labor power as being determined by those factors which either increase or decrease the number of people whose property less state leaves them no other choice but to work for wages. These factors include the process of primitive accumulation, the struggle over the wage employment of women and children, and the destruction of traditional modes of production by capitalist competition. None of these is sensitive to deviations in the wage rate above or below the value of labor power. Hence automatic adjust- ments in the supply of labor power cannot be counted on to ensure that the price of labor power will bear any determinate relationship to its value.

What relationship does Marx see the supply of labor power as bearing to the demand for it in the labor market? He assumes that, extept in rare instances, there will be an excess of supply over demand. He attributes this, on the one hand, to the cyclical nature of the demand for labor power wherein capital only intermittently and for brief periods absorbs the entire labor force and, on the other hand, to capital's increasing tendency to destroy more jobs than it creates through changes in the organic composition of capital.80 As Gintis and

7» Marx, Capital, 1: 616-621. 80 Ibid., pp. 612-640.



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Bowles note, this constant excess of supply in the labor market should drive wages down to physical subsistence levels or below. What prevents this from happening in Marx's view? Once again, the answer is the organized resistance of the

working class.81 As always, he does not predict what degree of success the working class is likely to enjoy in this regard, but it is clear that he saw nothing else lying between the working class and the abyss.

Does this ensure that the price of labor power will bear a determinate relationship to its value? It does, but only if we acknowledge that the value of labor power is itself determined by the class struggle. Then, whatever success the working class enjoys in raising the value of labor power above physical subsistence levels will automatically correspond to its ability to ensure that actual wage rates fluctuate around that center of gravity. If the center of gravity of actual wage rates did decline or rise, that would signal a corresponding change in the value of labor power within the framework of Marx's analysis as we have come to understand it.

Conclusion

We have seen that the formulation of a genuine labor theory of the value of labor power is fraught with logical difficulties and that Marx in fact paid only lip service to the effort. The theory of wages which he actually elaborated is, in form, a cost-of-production theory. It identifies five factors as determining the quantities of purchased inputs required for the reproduction of labor power and a sixth factor as determining the value of those inputs. This formal structure is deceptive, however, in that it suggests that technical consid- erations play a decisive role in determining the value of labor power. This is not the case in Marx's analysis. Instead, it is the

81 Ibid., p. 640.



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class struggle which plays the decisive role. It is the factor which ultimately determines both the value and price of labor

power. It also appears in his analysis as the basis of an alternative theory of capitalist exploitation using the concept of

nonequivalent rather than equivalent exchange in the labor market.

Rather than either a labor or cost-of-production theory, Marx thus constructed what amounts to a class-struggle theory of the value and price of labor power. To give the theory a formal structure which corresponds to this, its true character, would both eliminate the ambiguity which plagues the theory in its present form and remove any question of its susceptibil- ity to the criticism to which it has been subject.

To reformulate Marx's theory of wages in these terms would, of course, have a significant impact upon other parts of his economics. The biggest problem would be to sort out the effects of the change on the rest of his theory of value. I am not blind to the fact that disarticulating Marx's theory of

exploitation from the labor theory of value could be seen as substantially diminishing the attractiveness of the latter, but even defenders of the labor theory of value should be able to accommodate the change. In any case, what is the alternative? Marxists have never really had a genuine labor theory of the value of labor power, and it is hard to see how acceptance of a cost-of-production theory of wages, in which class struggle plays the decisive role, implies greater faithfulness to the labor theory of value than does adoption of a theory according to which wages are directly determined by the class struggle.



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Marx's Theory of the Value of Labor Power: An Assessment