Mario Marset

Jul 19, 2021

4 min read

On Marx’s Capital and the Political Economy of Labor

Amidst the rise of the Industrial Revolution, Marx develops his critique of modern political economy in his famous Das Kapital volumes. As capitalism rose in Western Europe, Marx writes a comprehensive review of the processes of modern capitalism to a gruesome degree of detail. As the quintessential critic of classical political economic thought, Marx developed his labor theory of value as an antithesis to the preconceived school of thought. He was adamant about denouncing the unequal distribution of forms of capital in society. Here I will describe firstly, the development of Marxist labor theory, secondly, the Ricardian-rooted surplus concept, and thirdly, the origins of wage labor.

Firstly, Marx used classical economic concepts to show very different results pertaining to labor economics. Using the renowned classical economist David Ricardo’s exchange of value concept, Marx shows that in a capitalist society there is surplus in exchange of value. This concept of surplus value is the result of the product’s value being considerably higher than the cost of labor. Ricardo firmly believed these two were to be similar. Marx, on the contrary, did not, since there is no capitalist interest in keeping a balance between the two variables. Concepts such as surplus value led to the labor theory of value. This theory draws a distinction within labor. In the Marxist perspective, labor is differentiated between its use value and exchange value. The former being the object’s utility and the latter the labor share in producing said object. This theory held one argument alone—considerably weak in structure—where Marx believed commodity’s exchange values needed to be able to be understood by the same commonly-shared factor. That factor is labor. Yet labor alone without an external variable of reference leaves the argument to be an incomplete formula.

Furthermore, Marx makes a distinction of different forms of capital which stem from the same labor. Constant capital is the means of production and other instruments that do not see their value altered by the production itself. To Marx, these means of production were also laborers themselves. Variable capital is the capital stemming from labor power which in fact saw a discernible increase in value; surplus.

Visually, I consider this as an extension from Ricardian exchange value between cost of labor and value generated. Marx creates a new function of variable capital which accounts for surplus value:

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v: variable capital
c: constant capital
s: surplus value

Using these letters, Marx concludes the following, c:v is the organic composition of capital, s:v is the rate of exploitation, and s:(c+v) the rate of profit¹. These relationships served as the Marxist explanation for classical economists’ shortcomings. Yet, most important to his critique of class inequality being an underlying structural problem within capitalism, is that he sees surplus as the standalone issue of this oppression. Before moving onto other economic concepts in his Das Kapital, Marx claims that only if the surplus is squeezed by the immediate producer, can this economic system of wage labor be separated from being slave labor.² Hereby is expressed in the original text in 19th Century German how Marx alludes to the term of immediate or direct laborer as unmittelbar:

Finally, Marx delves into the nature of wage labor through the concepts of working-day labor and capital accumulation to name a few. The former is, in Marx’s understanding, the gruesome bodily toll on laborers. The latter can be understood as the conflict generated by capitalists through their motivations of garnering capital and additional commodities. These goals require a herd of workers dependent upon their laboring power that only returns surplus value to said capitalists. Overall, Marx depicts a wage labor system existing when laborer’s subsistence is dependent upon their labor power. Therefore, this utility is exploited and laborers are removed from the control of the means of production with which they work¹.

¹ Marx, Karl. Capital: A New Abridgement. Edited by David McLellan. Oxford World’s Classics. New York: Oxford University Press Inc., 2008.

² Marx, Karl. Das Kapital. Kritik der politischen Ökonomie. Erster Band. Buch I: Der Produktionsprocess des Kapitals. Herausgegeben von Friedrich Engels. 4:231. Hamburg: Otto Meissner, 1890.
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This essay is a digest based of David McLellan’s edition and the entirety of this text serves as a summary of his preface explanations.