The wage is the tool of profit Ruthless Criticism

Marx’s arguments against wage labor, or:

“v” – the sum of money in capitalism which is the basis for the production, growth and distribution of wealth


In the critique of political economy, the abbreviation “v” stands for variable capital. That is, a part of the value that a capitalist (in modern terms: an employer, an investor, an entrepreneur, a job creator ...) invests in the form of money in order to increase it (in modern terms: to realize a return on an investment, to put the company in the black, to show a positive balance sheet ...). This part of the advance differs from the constant capital “c” in that it changes its magnitude and thereby the total sum laid out for the business.

This attribute of expanding itself, of course, does not belong to the sum of money, but to the commodity purchased with it; the labor-power that it acquires comes to the company in the figure of a worker (today: employee) and the work he does using the means and objects of labor that is represented in “c” creates products; selling these products allows the rightful owner to gain more money than he spent on the components of the production process. According to Marx, the reason for this growth, universally accepted as the goal of the free market economy, is that labor creates products whose peculiar use-value consists in being turned into money, or creating value; and more value than it cost the employer to pay for the labor-power.


This effect of “v” is ensured by the payment of labor-power, on the one hand, and the appropriate use of it, on the other. Because the ratio between the costs, which the wage represents, and the value, which the labor creates in the form of products that are sold, provides the “s” (surplus-value), which is what it’s all about.

It can’t be ignored that the amount of the wage conceded to the worker, who relies on it for his livelihood, has nothing to do with his labor and exertions. The labor paid and the labor done are therefore related to each other in order to turn labor-power into variable capital. The price of labor subjects the purchase of labor-power to the condition that its use results in an expansion of capital. The wage remunerates the value of the commodity labor-power so that the wage laborer carries out productive labor or produces surplus value. Such a “quality” of labor is always based on the productivity of labor, which changes with the performance of the worker and the means of production used, but is defined by the “productivity” of capital, or in modern terms: according to how profitable the payment for the work turns out to be.

The work is paid, then, to make it profitable, by opening up a quantitative ratio between the worker’s performance and his remuneration. This purpose of wages in capitalism is considered a normal thing, and at the same time continually denied. Once introduced, “pay for performance” is considered a sensible invention for finding the fair remuneration that a wage laborer deserves.


Marx called the subordination of labor to the creation of “s” “exploitation,” and criticized the increase in the rate of exploitation s/v as the business means by which the owners of capital imposed their right to make a profit on their property.

Already in Marx’s time, this gave capitalism’s fans no peace, because they wanted to prohibit this type of social indictment. Their practical measures against the nascent labor movement were accompanied by its theoretical rejection; and the arguments that were invented were so modern that today they are still considered useful. And some “misunderstandings” of “Marx’s theory” were even adopted by the labor movement and played no small part in its downfall – which today, however, is praised as its successful integration and its (political) participation in capitalism.

a) “Exploitation,” which is explained by the rate of surplus value arising from wage labor, is not a moral concept about an “unfair wage.” Nor does a complaint about unfair payment of workers attest to an absence of the ideals of “freedom and equality” in the world of private property.

b) “Exploitation” simply denotes the production relation between capital and wage labor; the owner of capital and of labor, respectively, are free and equal – these legal relations do not represent values that are waiting to be turned into realities; as legal definitions of practical positions in and towards the state, they are very real. As political premises, they form part of the production relation in question, which is characterized not by any type of legal difference, but by the material antagonism between the mutually exclusive interests of the classes.

c) “Appropriating the unpaid labor of others” is the purpose executed by capital – this is the way it expands, and only in this way. With this precise statement, Marx did not want to submit a proposal for a “just distribution” of the wealth measured in money; after all, he insisted that it is not the labor that is paid, but the labor-power; he regarded the form of wage labor as the appropriate way for capitalism to put the productivity of labor in the service of “s” – and not at all as a basis for spreading the slogan “a fair day’s wage for a fair day’s work.”

d) Marx was clear about this much: if work is dedicated to the purpose of producing value, which as money is the measure of wealth and guarantees exclusive disposal over it; if this wealth grows with the exertion and length of time of producing it – the productive power of labor is not used to create an abundance of use values in comfort and in support of disposable time – then the work itself is not linked with wealth. The wage laborers, who are budgeted along with their services as dependent variables of the expansion of capital (in modern terms: the economy and its growth), have ceded decisions about the productivity of their labor, as well as about their livelihoods and the extent of their well-being, to capital, which employs them or doesn’t.

e) Finally, as to the doubtless critical intent of the word “exploitation,” only the stupidest arguments were (and are) used against Marx in order to refute him. Against the finding that in capitalism the wage laborers are reduced, in the midst of the immense wealth created by them, to maintaining themselves as labor-power, and are not even able to; against the assertion that this is a necessary consequence of the relations of production, in which they are ruined in one way or another as human representatives of “v,” always the crudest of all moral “arguments”: compared with other creatures of the lower classes – in the past or today in other countries – things look pretty damn good! It is quite revealing that it is necessary to adduce such miserable figures as a standard in order to make capital’s wage laborers look prosperous. But more than that: this “refutes” Marx by prohibiting explanations to questions that, once raised, lead to a critique of the “system”: is wage labor, for all the wealth it creates, really any good as a “means of subsistence”? How and why (not)? Instead of claiming that the humans of 200 years ago or the inhabitants of distant colonies live in the same misery as the current workers of GM, Marx identified which needs prevail in capitalism. And he did this precisely to decide what can be done against the hardships that are felt in various ways by members of the working class.


That workers go to a company in order to earn a living is one thing. The conditions they face in doing so is another. The relation between pay and performance is in fact already fixed before a wage earner considers his needs and decides how much income he needs to earn through his “employment.” The price of labor is given by the job: an amount of money is connected to an extensive and/or intensive labor performance (time wages or piece-rate), and this performance results from the calculations of the capital. In this sense, any job is an offer combined with a command. The money side is defined by how much the labor-power costs; the labor side is fixed by its seller having to prove its worth as variable capital. It’s no secret that the calculation with property, which organizes its right to increase, is very much against the interests of labor-power. A lot of effort for little money corresponds to “growth” – the reverse corresponds to the needs of those who work, because they want to live (well) on it. It is true that the amount of wages paid has the character of “the value of the commodity labor-power”; as an amount of money, “v” must ensure the maintenance of the individual ability to work, or enable the means of living needed for this to be purchased. These necessities include a “moral and historical element”; both the “natural conditions” and the “cultural level of a country” form the customs and basic requirements of the workers, whose satisfaction is crucial to their willingness and ability to work on a regular basis. But at the same time, the amount of money representing “v” is an obstacle to the needs of capital – in the calculation of the company, the same necessities for working life are a cost, which according to the rules of subtraction diminish the surplus, and are therefore diminished as much as possible.


The “law of value,” according to which the value of commodities is the product of abstract labor and is measured in the socially necessary labor time, is appreciated more by the capitalists than by the economics professors. They practice it in the measures they take to obtain and increase surplus value. According to them, the reason for these measures is the competition they are “subjected to” – they don’t tell you that they compete with their capital for its increase. They pass off the necessities of their business interest as a compulsion they are forced to obey.

The lever they set in motion boils down to the determination to make various corrections in the price of labor which are not good at all for labor-power.

In order to achieve the surplus necessary for business from the sale of products, which is based on competition over commodity prices, capitalists always resort to the same method: they restructure the production process, and do so in a way that increases the efficiency of labor. The efficiency in question is the relation between costs and surplus. It is achieved by making use of the labor productivity that belongs to the owner of the means of production and is none of the business of the wage worker who is paid for his labor-power. After all, attributing this compensation to a “quantum of work” does not mean that the worker makes a cost-benefit analysis about how the operation is run – rather, it is the other way around: in his position as the “employee,” he is subjected to the technical organization, distribution of tasks and discipline that he finds there. With the payment of the labor-power, the capitalist has disposal over its use, like any other property, and uses it according to the imperatives of his cost-benefit analysis. The wage sum appropriates a performance – and nothing in this is changed 150 years after Marx if this appropriation is now called a “job.”

This form of payment of labor-power is the appropriate instrument for increasing the efficiency of labor, which is implemented by two complementary methods for producing surplus value:

a) Absolute surplus value starts from a given organization of labor. Order rules in the operations, the interlocking of the staff’s sub-functions is as controlled as the discipline by supervision and routine, and the wages of the employees are allocated for their customary output. The commodities produced get a price on the market that returns the invested capital with a surplus. The solvent demand proves to the owner of the capital that his commodities represent socially necessary labor, that under his regime additional value is generated which he accrues in the form of realized money. Then any extension of labor time is the suitable means for increasing the valorization of his capital because this measure accelerates the rate of turnover. The wisdom that in the business world time is money is enough to substitute for studying Marx – even this rule of thumb leads to the law that counts in capitalist enterprises: work must be as long as possible.

The practice of this law, as a tradition lasting to this day, means that

– generations of workers have been worn out before they even started to live from wage labor; the right of the owners of the means of production to set the schedule of operations was used in such a way that a lifetime was not enough to restore labor-power;

– the state, whose force introduced and supervised the use of free wage labor by capital as its economic foundation, saw the necessity for its first major social act: since then there is a normal working day fixed by law;

– this regulated working day is accompanied to this day by a remarkable number of exceptions; not only does it survive in a quite old-fashioned version – apparently, advances in productivity do not have much importance in this regard; everyone knows there are respectable reasons for overtime and extra shifts: the needs of the company.

The other reason that the wage worker allows an additional part of what now counts as “normal” living time to be turned into labor time is equally well known: the normal wage for the normal working day is pretty skimpy. With the payment of labor-power in the form of a price of labor – per hour or per piece – the assessment of the wage payment is emancipated from any consideration of the value of the labor-power. The requirements of working life, the recovery of energy, the needs that change with the development of production and its confrontation with market conditions – all this is expressly not considered when the wage level is set as money in exchange for services rendered. This indifference towards the workers’ basic necessities of life takes practical effect in the competition of the capitalists for and with the workers. When the early capitalistic labor market offered scant supply of skilled craftsmen for the manufactures, the precursors of big industry, the capitalists competed over the masters of respective trades – with the wage level. They immediately applied this viewpoint of performance justice, which makes business sense, to the abundantly available labor-power, which apparently did not have more to offer than physical strength. As soon as there was a differentiation of wages among workers – the “arguments” about performance and qualification were perfected later – it was a done deal that, first, the value of labor-power sinks and, second, is not paid to most workers.

b) Relative surplus value comes into being by increasing the results of labor through changes in its organization, especially by the introduction of means of labor that make the labor more productive. This method also represents a “conclusion” – from the competition on the market that the capitalistic company wants to beat to the production process that is under its control: “... and competition makes the immanent laws of capitalist production to be felt by each individual capitalist, as external coercive laws.”

The law in question says: work must be done in the most productive way possible. Not, however, because there are not enough products or work takes up too much of life, hence is too onerous. But expressly for the purpose of a production of commodities for the market that results in a capital increase. In this sense, the above “conclusion” from competition to production, from a market which does not permit profitable selling of commodities to labor productivity, testifies to one thing above all: the price of commodities that can’t be sold or earn nothing incorporates too much labor time. In any case, the “society” with its unforgiving criterion of money obviously proves to the capitalists who has worked too long on his products. He then remedies this defect through a productivity that identifies itself as socially necessary, in that it creates products which are profitable to sell even when they cost less than their precursors.

This is clear enough, but not to those who understand the same fact as a necessity and approve of it – as the need to “reduce production costs.” This idea may well serve as a guideline for the calculation in capitalist enterprises, which invest enormous sums of money to organize the labor process in a way that allows the produced commodities to yield a capital surplus. As an alternative to, or even a refutation of Marx’s explanation of surplus value, it is no good. Because the lowering of “production costs” can only be achieved by a huge increase in the invested capital, and the only thing that is saved are the labor costs, which can be reduced with increased advances on tools and machines. The intended and practically achieved result is an improvement of the commodity that has nothing to do with its useful qualities: it improves the ratio between the costs expended in production and the profit generated in sales.

This lucrative ratio that is achieved through changes in production is both strangely described and passed over as “lowering production costs.” The name of the program could just as well be “increasing the surplus,” but that seems too close to Marx’s theory for some people. The thing about socially necessary labor time as source and measure of value, the difference between the value of labor-power and its product as reason for surplus value – such theories are “indisputable” in a strange way: a different explanation of the origin of the surplus which is produced does not come up because the question is avoided. Instead, modern economics is continuously presenting testimony about how it is or has to be calculated so that there is “growth.” And apart from that, they consider the explanation of surplus value totally irrelevant given the “objective laws of economics,” and turn it into a moral question about who deserves the honor of creating value … This was hardly Marx’s intention when he determined the necessary consequences of relative surplus value for wage labor:

– The capitalists dedicate machinery to a task that banishes the (absolutely true) proposition that machines can make work easier to the realm of wishful thinking. The splitting up of the work required to manufacture a product into simplified sub-operations is not to make the work more comfortable, but to increase its pace. The intensification of work, which makes the payment for labor-power profitable, gets rid of the barriers that are still posed by the skilled use of limbs and tools. That’s why it is introduced.

– While the one-sidedness which the wage workers are subjected to as “appendages of machines” does no good at all to their nerves and the rest of their physique, sociologists and other artists lament the “meaninglessness” of modern work, leading to films titled “modern times.” Capitalists see the thing slightly differently. After verifying in practice the other determination of value-creating labor, of being abstract labor, i.e. “expenditure of brain, muscle, nerve, hand,” etc., they review the achievements of their labor-power; and they note that they have to take seriously that the measure of compensation is payment for labor. So job evaluations take place, meticulously investigating which exertions and skills are used and which are dispensable when productivity is no longer determined by individual skill, but by machinery. This involves reducing skills to measured movements and one-sided exertions, and results in a highly modern differentiation of wages. With this technique of “sound” cuts in wages, the labor-power by its payment is held responsible for the fact that capital requires only conditioned use of their abilities. That they, as labor-power, get to face problems – the wear and tear increases with the intensive one-sided burden – is one of the phenomena of “modern times.”

– The work, of course, also fulfills its responsibility for the profitability of the huge investments in the traditional sense: the “operating necessity,” which the rapid turnover of capital requires, comes into force with even more urgency. So the work time is as long as the business needs of the capitalists require. Shift work and overtime – “flexibility” in general – decline just as little with the “development of the productive power of labor” as the normal working day becomes shorter in relation to this development.

– It is not the drudgery that modern industry dumps on labor-power that is reduced, but first of all, the wage in relation to the sums of value which the labor affects and increases; and secondly, the number of workers who have the pleasure of a “job” and can earn their living. Capital produces, below those who must live on wage labor, an industrial reserve army. Not because it is incompetent or unable to “create jobs,” but because it employs wage labor only if it is conducive to its expansion. It develops the productive power of labor to increase the wealth measured in money as private property. Marx noted that the unemployed, who are not allowed to sell and actuate their labor-power yet somehow must maintain it, fulfill a second function as a sideline: they animate the competition among their equals over “jobs” and expand the freedom of the capitalists to press the price of labor below the value of labor-power. This finding by the theorist of surplus value is still acceptable even in this century: what Marx considered a necessity of the use of variable capital is today a convention which must be preserved: compared with the fate of the reserve army, the labor-power which is used and ruined is in a privileged position – and because of the unemployed, “employees” have to stop complaining and making demands.


On the basis of these lessons about surplus value, Marx could do without a theory of “meritocracy.” The inevitable consequences for the life of a worker spared him from setting up a theory of the “consumer and leisure society.”

As a rigorous value theorist, he quickly dismissed the doctrine, plausible in appearance at the time but wrong, that wages would be no more than the subsistence level. He was limited to the evidence that large numbers of the working class were reduced to the subsistence level and thereby destroyed. It was also clear to him that capitalist production – precisely because of relative surplus-value – also lowers the value of the commodities that are incorporated into the worker’s household. This broadens the scope of provisions that a worker can afford in serving capital. In this respect, he anticipated the modern theory that emphasizes that the workers of one hundred years ago were still not blessed with TVs or flush toilets.

On the other hand, it was not plausible to him that pure luxury should break out in the ranks of those whose source of income is wage labor. The determinations of the commodity labor-power, variable capital, simply give no evidence for this belief. These lead only to the capitalistic reasons for the undeniable fact that wage workers can simply never make ends meet.

a) The subordination of labor to the needs of capital means that labor-power is used ruthlessly. The individual, who is exploited as such, has to restore himself before the great freedom of life begins. His free time and energy on the one hand, the money earned on the other, are devoted to the reproduction of his labor-power. This exciting activity falls entirely within private life, but it concerns all the necessities that result from the strains of working. Neglecting these needs means neglecting himself and his own usefulness as labor-power.

b) Resources, time and money are limited. Not because they always are, but because of the services required by capital and the wages received for them. The art of getting by on a limited budget then proves its usefulness when actual free time begins.

c) Moreover, it is not only the productive effort in the service of the employer that leaves its mark on the organization of free time; when he leaves the company, the worker is still far from dismissed from the market economy and its laws. He faces a well-organized commerce that makes use of his purchasing power. He meets property owners who seize much of this purchasing power in rent. He lives not only in a house, but in a state that demands its fair tribute for protecting the prosperous collaboration between wage labor and capital, as well as for public services of a higher caliber; of course, the state also has a right to access the services of wage labor for its foreign ventures (in modern terms: intervention forces, peace-keeping and other responsibilities for the world). And, obviously, the government announces a need for funding these projects without asking the worker if he wants them, much less whether he can afford them. The state simply helps itself to the moral and historic element of the wage, which it already largely manages.


It is no wonder that panegyrists of capitalist prosperity line up against just as many protesters who speak of financial burdens and stress. One side never stops declaring their (disapproving) surprise at how much stuff many people – even though they are only wage earners – can afford. The other side sensitively bears in mind how tough it is for these people to afford and maintain their prosperity. Marx would not participate today in this endless debate. Because what wage laborers can realize in their free time is restricted to a very questionable participation in the pleasures offered by capital in exchange for money. On the one hand, these pleasures are accessible, even for the money that passes through the wage workers’ pockets in its function as means of circulation. On the other hand, the purchasing power in their pockets, along with the pertinent techniques of borrowing and saving, never allows for more than the conjunctures of state and capital permit. Third, every effort to cope with the limited purchasing power are impeded or negated because the decisive authorities of the market economy appropriate wages and achievements. Which is why, fourth, “prosperity” only exists as an average, under which lies a staggering amount of wage workers. Fifth, not even ownership of a car plus a surfboard proves that the reproduction of labor-power has been successful. Discussions about the “working poor,” which compete with those about health and the environment, only confirm what Marx alleged: “Capitalist production, therefore, develops technology, and the combining together of various processes into a social whole, only by sapping the original sources of all wealth – the soil and the laborer.”


The wage workers do not work in order to live, but the other way around: they organize their whole lives to endure work and its consequences for the reproduction of labor-power – their exploitation by capital guarantees it. The fact that, depending on the situation, there are wage workers who can not endure it, is reported in various media as poignant “personal tragedies.” Not only Marx noticed that everywhere and always enormous numbers of people inevitably undergo these kinds of tragedies, but also the state.

Even without having lived to see modern social legislation, Marx would not have been surprised by the state’s social side. What he witnessed in labor and factory legislation, the restriction of the working day and the proclamation of various health and safety standards followed the same logic as the modern welfare state.

In principle, that is, first of all, the basic type of calculation, thus the freedom of capital, is valid. The use of wage labor by legally protected private property has been established as the economic foundation of the nation. Second, the perception of the right to surplus labor, the treatment of the majority who have no property as variable capital, has consequences for labor-power: it makes them useless. This motivates the class state’s social concerns and deeds. As a welfare state, it insists on maintaining its economic foundation. It has acquired a good reputation because some of the relevant measures restrict the ruthless treatment of the wage workers. On the basis of this good reputation, everyone from socialists to socially minded statesmen to outright proponents of the market economy have added some “social benefits” to their programs.

Their compassion for the working class, which is not even able to reproduce itself, is practiced without any hindrance to capital. For all the highly predictable cases in which wage workers individually or collectively are condemned to uselessness, the modern state enacts a compulsory solidarity from above. Sickness, disability, old age, reserve army – all the kinds of impoverishment which labor-power is exposed to by capital – can rely on social assistance. The contributions that fund social “services” are paid from the wages of the working class, and the amount and duration of benefits are subject to the calculations made by the state in dealing with its money and its debts. Not that this is unfair. The supreme authority proceeds with the damaged wage workers the same way as capital, with the form of wage payment separating labor-power from its needs. They are kept alive because of their ability to increase money; if they cost money, the arrangement loses its purpose. And critics of “social cuts” are gagged by references to the treasury: “you can’t spend money that isn’t there.”

All those who are enthusiastic for a “replacement” of the class state by the welfare state find this a convincing argument: many members of the market economy would be far worse off without the welfare state. Less is heard about those who are classified as useless with the social state. And as the reserve army grows, so does compassion for the ailing treasury.


Another achievement of the welfare state is the legalization of unions. Marx also did not have to wrack his brain about this organized attempt to give wage workers their rights. The logic that “it would be even worse without them” was not acceptable here either. Not even in his most quoted comment on the “union question”:

“Unions work well as centers of resistance against the encroachments of capital. They fail partially from an injudicious use of their power. They fail generally from limiting themselves to a guerilla war against the effects of the existing system, instead of simultaneously trying to change it, instead of using their organized forces as a lever for the final emancipation of the working class, that is to say, the ultimate abolition of the wages system.” (Value, Price and Profit)

Today he would probably refuse to tolerate the “work well” thing. What remains is only a quite improper use of union power. It consists of the unions always acting as if the negotiations regularly held about the definition of the price of labor were something else. Namely, a correction of the sins committed by capital, the market and the state (in modern terms: labor productivity and inflation) against the value of labor-power. This not only shows that modern unions hold nothing higher than a “fair wage”; this organization of the workers in capitalism still pretends that collective bargaining decides the distribution of wealth. As if under the regime of private property, which uses, wears out and throws away the commodity labor-power, one identifies which share is due to which class from a – not at all existing – fund or pot!

The union calculates the right to a fair wage strictly on the success record of capital. However, the productivity of labor, which they argue is a good reason for a better deal, is already the profit rate of capital. So that the basis for a wage, which sees its justification deriving only from the profit of the opposing side, is sealed. And the “powerlessness” to provide jobs and wages as long as it is not profitable is also recognized.

This is why it is not surprising that modern unions in their attempts to bring distribution back into balance are capable of higher things. In all seriousness, they look after the ability of the capitalists to allow the wage workers to earn something. And all in the name of wage labor, whose mission, to promote “growth,” is beyond doubt. As far as the accruing ugly welfare cases that are difficult for the unions to represent – the customary pauperism!– are concerned, these organizations of the working class have their sympathetic partner in the welfare state. They can at most warn it that too many unemployed are a danger to social peace.

Through this program, the unions have already become “meeting points” – for nationalists. Wages do not matter to them, and they are willing to sacrifice a bit more for the nation than just the moral and historic element of wages.


Orthodox Marxism is dead; instead, “v,” labor-power, and the forces of capital and the state are thriving – unfortunately.

[Translated from GegenStandpunkt 2-1992]