Wages of Labour

Profit of Capital

Rent of Land

[IX. 1.]
from 12 to 16 hours during the past 25 years or so -- i.e., since labour-saving machines were introduced. This increase in one country and in one branch of industry inevitably carried over to a greater or lesser degree into other areas, for the rights of the wealthy to subject the poor to boundless exploitation are still universally acknowledged." [Wilhelm Schulz, Die Bewegung der Produktion, eine geschichtlichstatistiscke Abhandlung. Zurich and Winterthur, 1843, p.65]
...."But even this were as true as it is false, that the average income of all classes of society has grown, the differences and relative intervals between incomes can still have grown bigger, so that the contrast between wealth and poverty becomes sharper. For it is precisely because total production rises that needs, desires, and claims also increase, and they increase in the same measure as production rises; relative poverty can therefore grow while absolute poverty diminishes. The Samoyed is not poor with his blubber and rancid fish, for in his self-contained society, everyone has the same needs. But, in a state which is making rapid headway, which, in the course of a decade, increases its total production in relation to the population by a third, the worker who earns the same at the end of the 10 years as he did at the beginning has not maintained his standard of living, he has grown poorer by a third." [Wilhelm Schulz, pp. 65-6]

....But political economy knows the worker only as a beast of burden, as a working animal reduced to the slimmest of bodily needs.
...."If a people is to increase its spiritual freedom, it can no longer remain in thrall to its bodily needs, it can no longer be the servant of the flesh. Above all, it needs time for intellectual exercise and recreation. This time is won through new developments in the organisation of labour.
Nowadays, a single worker in the cotton mills, as a result of new ways of producing power and new machinery, can often do work that previously needed 100 or even 250-300 workers. All branches of industry have witnessed similar consequences, since external natural forces are increasingly being brought to bear on human labour.

[X. 1.]

[IX. 2.]
but the owners of capitals find it difficult to get labourers to employ. Their competition raises the wages of labour and sinks the profits of stock." [ Smith p. 316]
....Thus the small capitalist has two choices: he can either consume his capital, since he can no longer live on the interest--i.e., cease to be a capitalist; or, he can himself set up a business, sell his goods at a lower price, and buy them at a dearer price than the richer capitalist, and pay higher wages, which means that he would go bankrupt -- since the market price is already very low as a result of the intense competition we presupposed. If, on the other hand, the big capitalist wants to squeeze out the smaller one, he has all the same advantages over him as the capitalist has over the worker. He is compensated for the smaller profits by the larger size of his capital, and he can even put up with short-term losses until the smaller capitalist is ruined and he is freed of this competition. In this way, he accumulates the profits of the small capitalist. Furthermore: the big capitalist always buys more cheaply than the small capitalist, because he buys in larger quantities. He can, therefore, afford to sell at a lower price.
But, if a fall in the rate of interest turns the middle capitalists from rentiers into businessmen, conversely the increase in business capitals and the resulting lower rate of profit produce a fall in the rate of interest.

...."But, when the profits which can be made by use of a capital are diminished...the price which can be paid for the use of it...must necessarily be diminished with them." [Smith p. 316]
...."As riches, improvement, and population, have increased, interest has declined, and consequently the profits of stock; ...after these are diminished, stock may not only continue to increase, but to increase much faster than before.... A great stock, though with small profits, generally increases faster than a small stock with great profits. Money, says the proverb, makes money." [Smith p. 83]

....So, if this large capital is opposed by small capitals with small profits, as in the case under the conditions of intense competition which we have presupposed, it crushes them completely.
The inevitable consequence of this competition is the deterioration in the quality of goods, adulteration, spurious production, and universal pollution to be found in large towns.

[X. 2.]

[IX. 3.]
....The greater the demand for raw products and the consequent rise in their value may partly be a result of the increase in population and the growth of their needs. But every new invention and every new application in manufacture of a raw material which was previously not used at all or only used rarely, makes for an increase in the ground rent. For example, the rent of coal-mines rose enormously when railways, steamships, etc., were introduced.
Besides this advantage which the landlord derives from manufacture, discoveries, and labour, there is another that we shall see presently.

...."(4) All those improvements in the productive powers of labour, which tend directly to reduce the real price of manufactures, tend indirectly to raise the real rent of land. The landlord exchanges that part of his rude produce, which is over and above his own consumption, or what comes to the same thing, the price of that part of it, for manufactured produce. Whatever reduces the real price of the latter, raises that of the former. An equal opportunity of the former becomes thereby equivalent to a greater quantity of the latter; and the landlord is enabled to purchase a greater quantity of the conveniences, ornaments, or luxuries, which he has occassion for." [Smith, I, pp. 228-29]
....But it is daft to conclude, as Smith does, that since the landlord exploits everything which is of benefit to society,

[X. 3.]















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