The problem to be resolved is as follows. The owner of money has to buy his commodities at their value, and to sell them at their value, and nevertheless at the end of the process to realize a surplus. This is the end and aim of his existence as a capitalist, and if he does not accomplish it, he is as a capitalist a mere failure. So that his development from the mere money owner to the full-blown capitalist has to take place at once within the sphere of circulation and without it: that is, he must follow the law of the exchange of commodities, and nevertheless must act in apparent contradiction to that law. This problem cannot be solved merely by means of the money which he owns, the value of which is, so to say, petrified. As Ricardo says, 'In the form of money, capital has no profit'. As money, it can only be hoarded.
Neither can the surplus originate in the mere re-sale of the commodity, 'which does no more than transform the article from its bodily form back into its money form'. The only alternative left is the change should originate in the use-value of the article bought with the money in the first instance and on which the capitalist has to operate.
'In order to be able to extract value from the consumption of a commodity, our friend Moneybags must be so lucky as to find within the sphere of circulation, in the market, a commodity whose use-value possesses the peculiar property of being a source of value, whose actual consumption therefore is itself an embodiment of labour, and, consequently, a creation of value. The possessor of money does find on the market such a special commodity in capacity for labour, or labour-power.'
By labour-power or the capacity for labour Marx understands the whole of the mental and physical capacities in a human being which are brought into action in the production of commodities; in short, the man and all that is in him as a wealth-producing machine.
Now in order that the possessor of money should find this necessity to the accomplishment of his end and aim – viz., labour-power as a commodity of the market, various conditions are requisite.
The man who is to exercise the labour-power for the capitalists' benefit – the labourer – must be 'free', that is, his labour must be at his own disposal, and also he must have nothing else to dispose of for his livelihood but his labour-power. On the other hand, any one who has to live by getting commodities other than labour-power must own the means of production, and also the means of subsistence while the commodities are being got ready for the market, and being converted into money.
As to the value of this article necessary to the life of the capitalist, this labour-power, it is estimated like the value of every other commodity by the average time necessary for its production or reproduction; that is the average time necessary in a given state of society; and in plain language this reproduction of labour-power means the maintenance of the labourer. 'Given the individual, the production of labour-power consists in the reproduction of himself – or his maintenance.'
Labour-power is realized only in action, that is, when it has become actual labour, and is producing a commodity; so that, 'the value of labour-power resolves itself into the value of a definite quantity of the means of subsistence. It therefore varies with the value of those means, or with the quantity of labour requisite for their production'.
The minimum limit of the value of labour-power is therefore determined by the value of these means. If the price of labour-power falls below that minimum it is destroyed: a haggling as to its price has to be gone through between the buyer and the seller, and the price is fixed by contract, though it is not realized until the article is consumed. From what is stated above, it will be seen that this contract is made between two parties; on the one hand the workman, or machine for production, who has no means of producing, on the other the possessor of money who has all the means necessary for working the machine and has therefore become a capitalist. 'He who was before the money-owner now strides in front as a capitalist: the possessor of labour-power follows as his labourer. The one with an air of importance, smirking, intent on business; the other timid and holding back, like one who is bringing his own hide to market, and has nothing to expect but – a hiding.'
The labour process necessary to Capitalism exhibits two characteristic phenomena: first the labourer works under the control of a capitalist, and secondly the product of the labourer is the property of a capitalist, and not of the labourer, its immediate producer. This product appropriated by the capitalist is a use-value, 'as for example yarn, or boots'; says Marx with a grin, 'but although boots are in one sense the basis of all social progress and our capitalist is a decided 'progressist', the capitalist does not for his special purpose look upon them as boots, or any other use-value. He has primarily two objects in view: first he wants to produce a use-value, not, again, for the sake of its use, but in order that he may exchange it; and next, in order that his exchange may be fruitful to him, he wants to produce a commodity the value of which shall be greater than the sum of the values used in producing it – that is, the means of production and the labour-power.'
This he is able to accomplish as follows. He buys the use of the labour-power of the workman for a day, while a certain duration of labour in the day is enough to reproduce the workman's expended labour-power – that is, to keep him alive. But the human machine is in all cases capable of labouring for more hours in the day than is necessary for this result, and the contract between the capitalist and the labourer as understood in the system under which those two classes exist implies that the exercise of the day's labour-power shall exceed this duration necessary for reproduction, and it is a matter of course that the buyer of the commodity labour-power should do as all buyers of commodities do – consume it altogether for his own advantage(1).
It is on this industry, the buying of labour-power in the market, and the consumption of all the results of its exercise beyond what is necessary for its reproduction, that the capitalist lives, just as the industry by which the workman lives is the production of commodities.
1. Says Mr Boffin in Dicken's Mutual Friend, when he wants to make a show of striking a somewhat hard, but reasonable bargain: 'When I buy a sheep I buy it out and out, and when I buy a secretary I expect to buy him out and out', or words to that effect; and the reasonableness of the conditions are accepted on all handsback.
Commonweal, Volume 3, Number 68, 30 April 1887, p. 141