wealthier capitalists and a growing mass of impoverished workers. The laborpower that the capitalist buys from the worker at the lowest price, the so-called minimum or subsistence wage, is the ultimate source of the capitalist’s wealth. Marx shows that each step in the process of creating more wealth among fewer and fewer capitalists is accompanied by the increasing diminution of workers and their disposability in capitalist production. Simply put, the march of capital tramples those who initially create it, the working class.
Marx begins the chapter by recognizing how the growth of capital impacts the working class as the result of processes that govern capitalist accumulation and determine the composition of capital, which is always determined by the ratio between constant capital—buildings, machinery, land, raw materials, etc.—and variable capital, human labor-power. Once capitalism enters its industrial stage, the drive for greater efficiency in production always causes constant capital to grow—with greater reliance on technological innovation—relative to variable capital. Marx posits the relation between these two variants as the organic composition of capital. Simply put, as greater wealth is produced on the basis of more machines employed throughout production, an increase in constant capital, the more that living labor, or variable capital, is diminished in production. Every technological advance aimed at greater efficiency in production to maximize profits also disposes more workers who thereby become impoverished.18
At the risk of reducing complex formulations to simplest terms, we can say that Marx aims at a scientifically based argument that demonstrates how the value of capital at any moment is based on the amount of labor-power extracted from workers by capitalists in the course of expanding production. It can be extracted because the capitalists own what the workers must have access to, the nonhuman means of production. This fundamental inequality is what allows employers to take from workers more than what they are paid in wages. Put simply, workers produce all of the output but, in effect, get only part of it back, just enough to sustain their lives. For the capitalist, the appropriation of labor-power from the worker translates into surplus-value, or unpaid labor, which is the basis of capitalist profit. Human labor, therefore, is the dynamic force in production that creates more capital through its appropriation by those who already own it. As the political economist Harry Braverman wrote, “The working class is the animate part of capital, the part which will set in motion the process that yields to the total capital its increment of surplus-value.”19
Marx argues that all growth in capital is based on the productiveness of labor, specifically, the necessary levels of productivity supplied by the labor-power of workers. For capital to accumulate within the framework and mechanisms of industrial production requires that part of the surplus-value generated by it must be “re-transformed” into additional labor-power.20 When this occurs, capitalists must employ more workers to accumulate more capital. On the surface, this seems like a good thing for workers since their numbers rise. Given the degree to which the requirements of accumulation may exceed the supply of labor, wages might even rise. But the “favourable circumstances in which the wage-working class supports and multiplies itself, in no way alter the fundamental character of capitalist production.”21
Why is this so?
As stated above, Marx explains that the enlarged scale of production requires capitalists to employ more workers. Yet the increase of employed workers must always benefit the owners of capital since their sole aim is to raise productivity by whatever means and methods necessary to maximize profits. Marx emphasizes that the bottom line for every capitalist is the “augmentation” of his capital. This means ensuring that the production of a commodity contains more labor-power than is paid to the worker in wages. For the capitalist, this is the source of surplus-value; in other words, the amount of unpaid labor-power that is realized as profit when the commodity is sold. On this basis, Marx concludes that the “production of surplus-value is the absolute law” of the capitalist mode of production.22
At any given moment, the capitalist must acquire as much surplus-value as necessary to offset the wage he pays the worker. This will vary depending on specific conditions and circumstances in production and exchange. For example, a burst of accumulation and growth dictates a corresponding need for additional labor. Capitalists suddenly need more workers to boost production. It could even lead to higher wages, so long as the cost does not impede the rate of surplus-value required to sustain accumulation and more profits. This is beneficial to workers but only in the short term. As Marx says, an immediate reaction sets in as soon as the amount of paid labor impedes the production of surplus-value. This means there is less profit that can be invested in furthering the means of production. The bottom line is that any rise in wages diminishes surplus-value and impedes accumulation, which is why capitalists must check rising wages at some point.
This is why Marx says that “the rise of wages therefore is confined within limits that not only leave intact the foundations of the capitalistic system, but also secure its reproduction on a progressive scale.” Wages can never rise beyond the limits required for the progressive reproduction of capital. Put another way, capitalists can never allow wages to undercut the rate of surplus-value, to the extent that it impedes or halts the reproduction of capital needed at any moment. Conversely, Marx says, this is why labor becomes increasingly subject to capital. In the period of early industrial capitalism, the requirements for accumulation often took the form of lengthening the working day without increasing wages, thereby extracting an even greater amount of surplus-value from the worker in absolute human terms. This is why trade unionism in the second half of the nineteenth century in England fought for and succeeded in reducing the legal limit of the working day from twelve to ten hours. Despite these victories, however, there were limits to what labor could achieve. For Marx, the great and unique irony about the capitalist mode of production was “man … governed by the products of his own hand.”23 What does this mean? Simply this: workers set in motion the greater reliance on the machinery they themselves produce, which ultimately removes them from the processes of production.
These processes became more intense as a result of competition between capitalists. Winners succeed in great part because the surplus-value they appropriate from their workers enables them to sell their commodities at the cheapest price. As winners, they vanquish small businesses and larger competitors as well, either drawing in the capital of those they have overcome, or destroying it completely. Either way, the result is a greater centralization of capital, which pulls together scattered sources of money across the marketplace, helping to fund a credit system that facilitates the further expansion of capital. Marx says that centralization and credit become the “two most powerful levers” in the further development of capitalist production and accumulation.24
On this basis, the joint-stock company, forerunner of the modern corporation, accelerates accumulation “in the twinkling of an eye.”25 Empowered by credit, revolutionary advances in the technical composition of capital—in a word, machinery—continue to raise the proportion of constant capital in relation to variable capital. This is how the value of capital increases. Existing production must always be re-transformed to a higher degree of technical perfection, requiring a smaller quantity of labor to set in motion a larger quantity of machinery and raw materials.
Marx proceeds to argue how capitalist accumulation creates a “disposable industrial reserve army” of labor that exists solely for the benefit of the capitalists. With the advance of technological innovation, workers are set free into a growing population of the unemployed. Some do find work in other capitalist enterprises, usually older companies that lag behind in new machinery and pay lower wages. Accumulation determines at any given time those employed at various wage levels as well as the unemployed, all who make up what Marx calls “the social capital in its totality.” But this totality is always rocked by fluctuations caused by the changing composition of constant and variable capital, that is, more machines, less human labor. Sometimes these fluctuations are what Marx calls “violent.” When production expands, so does the need for variable capital, though this is temporary. Because growth is based on constant technological innovation in the most advanced industries, fewer workers are required for production over the long haul. This results in the striking and outright loss of jobs in those industries and makes the absorption of labor in the older capitalist enterprises more difficult. The very expansion of production