In his paper “Wage Labour and Capital,” Karl Marx (1849) writes:
[An] increase of capital is [an] increase of the proletariat, that is, of the working class…[C]apital and wage labour are two sides of one and the same relation. The one conditions the other, just as usurer and squanderer condition each other. (p. 210; italics in original) The workers, who own no means of production of their own, must seek jobs in order to live. They get hired by a capitalist and work for him, producing some sort of goods or services. These goods or services then become the property of the capitalist, who sells them and gets a certain amount of money in exchange. One part of the wealth produced is used to pay the workers' wages, while the other part (surplus value) is split between the capitalist's private takings (profit), and the money used to pay rent, buy supplies and renew the forces of production. Thus, the wealth has been consumed reproductively for the capitalist and unproductively for the worker, because the value of the wealth he exchanged for the means and substitutes, and, therefore, lost it forever. The only way to get money for the worker is to repeat the exchange of his labour power to wage with capitalist. Therefore, according to Marx, “capital presupposes wage-labor; wage-labor presupposes capital. They condition each other; each brings the other into existence.” (Marx, 1849). A worker produces not only product, but, first of all, he produces capital that can multiply itself by exchanging for labour power. Labour power, in turn, can exchange itself for the capital only by increasing the capital what leads to increase of working class or proletariat. Marx’s Assumptions, Definitions, and Inferences
Marx made an assumption that “Capital presupposes wage labour; wage labour presupposes capital. They reciprocally condition the existence of each other; they reciprocally bring forth each other.” (Marx,1849). So, wage labour and capital have a common interest? According to Marx, there is more than one answer: yes and no. Yes, in that capital only thrives by exchanging itself for wage labour. The more capital increases, so does wage labour. No, in that the increase and profitability of capital is simply to increase the power of the master over the slave, the increased domination of the capitalist class over the working class. The most tolerable situation for workers under capitalism may well be for the fastest growth in productive forces, of capital. But the respective gains for the capitalist class and the working class are hardly equal. The capitalist class already has power over the working class. The strengthening of capital increases further the power of the capitalist class to appropriate an even greater relative share of wealth than before. Whilst money or even real wages may grow in times of prosperity of capital, the stupendous growth in the wealth appropriated by capital may mean that in society as a whole, the position of wage labour is relatively worse off than before. The important definitions are given by Marx:
The proletariat, it was asserted in the Communist Manifesto, as “a class of labourers, who live only so long as they find work, and who find work only so long as their labour increases capital” must therefore as a class be “exposed to all the vicissitudes of competition, to all the fluctuations of the market.”(Marx and Engels,1888) Labour power - refers to a person's ability to work, his muscle power, dexterity and brain-power. In capitalist society labour power becomes a commodity that possible to sell and buy on the market. A worker sells his labour power to an employer in exchange for wage or salary for definite period of time. During that time, the worker does actual labour, producing goods and services. Then the capitalist can sell these and realize a profit (surplus value) that came from the difference between wages paid to the workers and the value of the goods or services they produce for the capitalist. Wages or salaries - are the price of labour power that capitalist pays to a worker. The level of wages depends on the demand for labour, the level of unemployment, and the ability of workers and employers to organize and take action with regard to pay claims. “Wages are determined above all by their relations to the gain, the profit, of the capitalist. In other words, wages are a proportionate, relative quantity.” (Marx,1849).
The inferences that Marx suggested based on relationship of capital and proletariat became one of the main concepts for his many other works. Marx's and Engels's account of the development of the proletariat in the Communist Manifesto follows immediately on from the account of the crisis tendencies of capitalism, but is not explicitly related to it. The development of capitalist production develops the proletariat, reducing the worker to “an appendage of the machine”, driving wages down to the subsistence minimum, intensifying labour and extending the working day. The generalization of capitalist production destroys artisanal petty production, while small capitalists cannot withstand the competition of the large, so that “the lower strata of the middle class... sink gradually into the proletariat” (Marx and Engels, 1888), leading to a progressive polarization of society into two social classes. Conclusion
“With the development of industry the proletariat not only increases in number; it becomes concentrated in greater masses, its strength grows, and it feels that strength more” (Marx and Engels, 1888). Sectional and cultural divisions within the proletariat are broken down “in proportion as machinery obliterates all distinctions of labour, and nearly everywhere reduces wages to the same low level”, while commercial crises make the wages of the workers ever more fluctuating and “the unceasing improvement of machinery.. makes their livelihood more and more precarious” (Marx and Engels, 1888). These are the conditions under which workers begin to form trades unions and the workers direct their struggle against the employers.
Heilbroner, R. (1999), The worldly philosophers: The lives, times, and ideas of the great economic thinkers. Simon and Schuster. Marx, K. (1849). Wage labor and capital. Retrieved May 10, 2008 from University of Redlands, Course BUAD 610-Context for Contemporary Business. Marx, K. (1849). Wage labor and capital. Retrieved May 11, 2008 from http://www.marxists.org/archive/marx/works/1847/wage-labour/ Marx, K. and Engels, F. Collected Works. Progress, Moscow and Lawrence and Wishart, London, 1975. Marx, K. and Engels, F. (1888). The Communist Manifesto. Retrieved May 10, 2008 from http://www.marxists.org/archive/marx/works/1848/communist-manifesto/index.htm