Chapter 6:  The Sale and Purchase of Labour Power

Outline of Marx's Discussion


Marx makes the transition from the sphere of circulation to the sphere of production by deducing that the origin of surplus-value lies within the realization of the use-value of labor-power. In the process, he examines briefly both its exchange-value and its use-value. By focusing on the specific use-value of labor-power as source of surplus-value, he highlights its central value to capital. In later chapters, he returns again and again to the quantitative determination of surplus-value but he begins here, and continues in Chapter 7 focused on the qualitative aspect of the use-value of labor-power. At this point, his concern with the exchange-value of labor-power is only to show that capitalists can extract surplus-value even in the presence of equal exchange. Now let us follow Marx from circulation to production.

He reasons as follows:

1. The increase in the value associated with the formula of capital M – C – M' cannot take place within the exchange M – C because the value of C is merely the transformed value of M.

2. Nor can the increase originate in the second act of sale C - M for this too is only a change in form.

3. The increase "must therefore take place in the commodity which is bought in the first act of circulation," i.e., in the C acquired through M - C.

4. But, it cannot occur within the exchange-value of C if we assume equal exchange.

5. Therefore, "the change can originate only in the actual use-value of the commodity."

6. The question is, is there a commodity whose use-value "possesses the peculiar property of being a source of value"? Whose consumption involves the creation of value?

7. The answer: yes, and the commodity labor-power, or the capacity and willingness to work.

Definition of labor-power

"The aggregate of those mental and physical capabilities existing in the physical form, the living personality, of a human being, capabilities which he sets in motion whenever he produces a use-value of any kind."(1)

Although this definition is gendered and a-historical, i.e., abstracted from the specific conditions of capitalism, the whole context—the analysis of capitalism in a book titled Capital—makes it quite clear he is analyzing a set of social relationships within that framework. Although this definition lacks any specificity about "mental and physical capabilities," the one I have emphasized, without which all the others are moot, is the willingess of people to work for capitalists. Whether obtained by coercions of the types analyzed in the section on primitive accumulation or by more sophisticated modes of education and propaganda that normalize waged and salaried labor, willingness—begrudged or enthusiastic—is a trait capital must engender to get people to actually work once they have been hired in the labor market.

The Labor Market

Marx begins his analysis of the labor market with the demand for labor-power, the M that its holder wishes to convert into capital by purchasing workers' labor-power (one part of C) and putting them to work generating surplus-value, to complete M – C – M'. How the would-be capitalist comes by enough money to hire workers (and to be able to purchase the necessary means of production) is skipped over in this chapter, although we have seen his historical analysis of this in Part VIII, Chapter 29 on the rise of agrarian capitalists and in Chpater 31 on the rise of industrial capitalists.

He then specifies two conditions that must be fulfilled for there to be a supply of labor-power available for purchase:

These are exactly the conditions for the creation of a working class, whose historical origins Marx traces in Part VIII . He explains not detailing this history (he does mention it) by saying, "We confine ourselves to the fact theoretically, as [the capitalist] does practically."(3)

He then goes on to discuss first the value, and then the use-value of labor-power within capitalism.

The Value of Labor-Power

The value of labor-power, he writes, "is determined . . . by the labor-time [socially] necessary for the production and consequently, also the reproduction of this specific article. [my emphasis]." (4) But what does this mean to "produce" labor-power and how, if at all, is its "reproduction" different from its production? Assuming an already constituted capitalism, the production of labor-power evokes at least two elements, both of which he mentions. First is the procreation of children: "The production of labor-power must include the means necessary for the worker's replacements, i.e., his children." (5) Second is the training of children willing and able to work for capital. For most working-class children of Marx's time, training was on-the-job, sometimes as apprentices or in penal labor in the workhouses.(6) In more recent times, mass public education has provided the disciplining and psychological conditioning required for most, although juvenile detention facilities still incarcertate the recalcitrant and "rehabilitation" is usually defined by a return to work.

The broader category of the reproduction of labor-power also includes day-to-day reproduction, from feeding and clothing to whatever patching-up—both physical and psychological—is required for the "maintenance" of workers' ability and willingness to return to work. Moreover, given technological change and the ever-increasing precariousness of jobs, procreation has become an industry and training and retraining have become common not only among the young but among adult workers. Such changes illustrate why Marx notes that what is required for the production and reproduction of labor-power has "a historical and moral element." Requirements have changed over time with the evolution of class relationships. The reproduction of labor-power clearly includes the production of labor-power as a subset of all those activities involved.(7)

While all the work involved in the reproduction of labor-power has an impact on its value, Marx defines that value as “the value of the means of sub¬sistence necessary for the maintenance of [the] owner of labor-power.”(8) In other words, in the little circuit, LP – M – C(MS), the value of labor-power, LP, and hence the amount of money, M, that capital must pay workers is determined by the value of the use-values, C(MS), required for their production and reproduction.(9)

Left out of this definition is all the essential work involved in reproducing labor-power not involved in the production of consumer goods, e.g., housework and schoolwork. The work of the waged agricultural laborer who produces food necessary for the reproduction of labor-power is included in this definition, but the work of the unwaged housewife who prepares the food and sets it on the table for consumption and then washes the cooking pots and serving dishes is not included. The work of salaried writers, editors, proofreaders, typesetters and bookbinders who create textbooks is included, but the unwaged work of the student who spends hours studying those textbooks is not included. Were the housewife hired as cook or waitress in a restaurant, or the student a salaried employee being trained on the job for a new position, their labor would be included.

Both Marx and the classical political economists, such as Adam Smith, were well aware of the existence and necessity of such work. But they saw it as outside of what they felt was capital’s new way of organizing work, i.e., profitable commodity production. Smith, for example, juxtaposed putting people to work producing commodities to paying people to provide personal services. The latter, he argued, had to be paid out of some external source of revenue, e.g., land rents for the owners of large estates, such as the one portrayed in the TV series Downton Abbey, or wages or salaries for less well-off individuals. Workers hired by capitalists, however, generate the revenues necessary for their rehiring by producing commodities sold at prices that cover the costs of production plus a profit. Such workers, Smith called "productive," whereas personal servants he dubbed "unproductive." Marx retained this nomenclature with the addition of awarding the title "productive" only to those commodity-producing workers whose products embodied surplus-value.(10)

Not only are housework and schoolwork ignored in this definition, but so too is their impact on the value workers must receive for the purchase of consumer goods and services. For example, the more unwaged domestic food production, via gardening or subsistence farming, the fewer food commodities workers need to purchase and therefore the lower the value of labor-power and the lower the wage, M, required to buy C(MS). Or, the more schoolwork that can be imposed on children, or adults in retraining, the fewer waged teachers are required and lower the amount of revenue diverted to schools and training programs. Inversely, the less housework performed by unwaged housewives—due to escape or rebellion—the greater the wage must be to purchase services that were once performed at much lower cost.(11) Similarly, the less schoolwork children are willing to do on their own, the greater the expense of forcing them to work, via more teacher oversight, police in schools and court enforcement of laws against truancy.

Unlike Marx, we can trace such connections by extending the little circuit LP – M – C(MS) to a full-fledged circuit of the reproduction of labor-power, i.e.,

LP – M – C(MS) . . . Pc . . . LP*

where consumption is organized by capital as the work (Pc) of reproducing labor-power LP*. The impact of changes in the amount of such work will depend on the nature of the work. In the case of procreation and the rearing of children, LP* would have to be greater to meet the needs of an expanding population. In the cases mentioned above, of housework and schoolwork that substitutes for purchased commodities or waged labor, the value of LP* would be lower.(12)

Differential training requirements for different jobs explain, in part, the wage and salary hierarchy. The greater the complexity of skills required, the greater the expenditure required to produce labor-power. While some expenditure on training occurs directly on the shop floor or in offices by employers or other workers, much more derives from wages and salaries that make it possible for parents to pay for their children’s schooling. Data showing that families tend to rear children to similar skill levels tend to confirm this, e.g., university-educated parents tend to have jobs with salaries high enough to send their children to universities.

When not all members of the family are earning a wage or salary—as was common in Marx's time—those who are employed must earn a "family wage" that can pay for the production and reproduction of all members of the family. In other words, the wage must purchase enough means of subsistence to reproduce the unwaged as well as the waged. It was the prevalence of wages too low to meet this need that drove workers to fight to have their wages complemented by direct payments by the state-as-collective-capitalist, e.g., programs of unemployment insurance, aid to dependent children, etc.

We should note that the famous "moral and historical element" determining the level of wages remains very much unspecified at this point. Saying this is determined by "the level of civilization" is not saying much. Later on Marx will make clear that the major determinant is the balance of power between the classes—that the exchange-value of labor-power is determined by working class power vis-é-vis capital, which changes historically, and morally as the working-class is able to impose its "morality" of less exploitation on capital.

Toward the end of this discussion there is a curious passage in which Marx writes about a “minimum limit” of the value of labor-power. “The limit is formed by the value of the physically indispensable means of subsistence.” Yet he then goes on to say that “if the price of labor-power falls to this minimum, it falls below its value” because the labor-power functions at less than normal quality. Less than normal quality work, i.e., lower levels of productivity, we can suppose, would be the consequence of underpaid workers being either malnourished and sick, or disgruntled, angry and resisting work more than usual. So, there would seem to be no such thing as a “minimum limit” after all. Instead, what we have, as integral to the wage and salary hierarchy, are parallel hierarchies in healthiness, illness and willingness to work, where those who are paid more can afford better medical care, those who are paid less cannot and those who are paid the least are frequently malnourished, sick and angry. (13)

What the issue of “minimum limit” evokes is our (workers’) judgement of the adequacy of the use-values we receive, in terms of health, both physical and psychological. Can we buy enough commodities—food, clothing, housing, toys and services—and enough of the right sort, to be healthy, able and willing to work? Do we have enough time and energy, to "consume" them, i.e., put them to use in our efforts to live lives worth living. So, we try to figure out which commodities we need, what their prices are, and what our wages or salaries can buy. For the most part, we do these things in the order of Marx's little circuit LP – M – C(MS), i.e., we look for and try to find a job that will earn us a wage or salary, LP – M, and then spend our money on what we need M – C(MS). But longer term, we often reason in the opposite order: first deciding how we want to live, figuring out what commodities are necessary for that kind of life and then we either look for a job that will bring in enough money so that we can afford to live that way, or if we cannot find one, we take a less remunerative job and then fight for higher wages or for a better-paying position.

Whatever kind of job we obtain, there is no guarantee that what our wage or salary can purchase today will be the same tomorrow. If we are lucky, increases in the productivity of the production of consumer goods will reduce their per unit values and prices so our money income will purchase more goods and services.(14) If we are unlucky, their per unit values and prices will rise so that we can only obtain fewer goods and services. Such might be the result of anything that requires more socially necessary labor in the production of either existing goods or new ones required for reproduction. Such changes are easier to see in changes in supply and demand beyond the control of workers. Capital may transfer value to itself by artificially restricting the supply of some goods, e.g., oil or coffee, or stimulate demand (through advertising) to drive up prices, undercut real wages and the value of labor-power. Or, as we saw in Chapter 3, it has often intentionally triggered a general inflation of prices by expanding the supply of fiat money, to transfer value from those on fixed wages to the owners of commodities whose values haven't changed but whose prices have. In each case our income buys fewer or lower quality consumer goods. Another way in which the value of labor-power can be lowered is through the kind of cheating Marx describes in his footnote on the adulteration of bread. When workers spend their wages, they expect to get a commodity of a usual, recognized quality. If the quality is reduced by adulteration—incorporating ingredients of lesser value because requiring less labor—and the baking company sells their bread at a price above its now lower value, buyers are cheated and receive less use-value than otherwise.(15)

The Use-Value of Labor-Power

The use-value of labor-power, Marx writes, "consists in the subsequent exercise of that power [of the aggregate mental and physical capabilities. . . of a human being]." The exercise that preoccupies him here produces commodities, which capitalists sell with the aim of making a profit. He is not concerned, for the moment, with the exercise of those capabilities in the production of labor-power itself, e.g., housework and schoolwork, although they are exercised daily in its reproduction. Nor does he examine how those capabilities are sometimes exercised completely outside the circuits of capital, for autonomous purposes of workers, e.g., discovering alternatives to capitalist ways of doing things.

Now, the use-value of labor-power that most vitally concerns capitalists is its "peculiar property of being a source of value, whose actual consumption is therefore an objectification of labor, hence creation of value." As we will see in the next chapter, by "objectification of labor" he means the way workers' abilities, directed by the will of their employers, become embodied in their products, the objects and services they produce. (16) In other words, if labor-power is the capacity to work, then the use-value of labor-power includes not only its exercise, the work of creating commodities embodying surplus-value, but also the use-value of that surplus-value, which can then be used to impose more work. Not just any exercise of human capabilities, but imposed labor, and—through re-investable surplus-value—ever more labor to boot.

The "ever more labor to boot" is essential. "The process of the consumption of labor-power" must be not only "the production process of commodities" but also the genesis of "surplus-value"—required for investment and the expansion of the system. Work is value only when it produces surplus-value, when it contributes to the expansion of value. Work which does not, may serve the function of social control when it occurs, but if it does not result in sufficient surplus-value, then the imposition of that kind of work will cease. (17) I discuss this further in the next chapter.

We now pass as Marx says fully into "the hidden abode of production where . . . the secret of profit making must at last be laid bare". To do so, we must leave the fetishistic realms:

And enter into the realm of COERCION—where, as we will see, the capitalist rules as a despot, and the workers slave as cogs in the machine —at least in as much as the capitalist can make them do so!

Concepts For Review

    value of labor-power
    LP – M – C(MS)
    family wage
    "moral and historical element"
    means of subsistence
    use-value of labor-power
    LP – M – C(MS) . . . P. . . LP*
    labor of reproduction
    productive and unproductive labor

Questions For Review

1. Explain the reasoning through which Marx concludes that the origin of surplus-value must lie within the C of M – C – M'.

2. Explain the difference between labor and labor-power. Why does Marx insist on this point?

3. What are the conditions which must be met for there to be a market for labor-power? What does this have to do with primitive accumulation?

4. In what double sense are workers free within capitalism?

5. Distinguish between the exchange-value and use-value of labor-power? Discuss the interests of the capitalists and the workers in these two sides. In what ways are they focal points of struggle?

6. Discuss the upper and lower limits of the value of labor-power. What factors determine where it will in fact be found between these two bounds?'

7. What is the relationship, if any, between work performed in consumption of the means of subsistence and the value of labor-power? Is this commodity producing work? What is the difference between this work and work done in factories or on farms?

8. What is there in Marx's discussion of the determination of the value of labor-power which might give us some insight into the structure of the wage hierarchy?

9. Should we include transfer payments such as social security, unemployment benefits of federal aid to students in the value of labor-power?

10. When and where do workers give the capitalist credit? Do you know of situations in which there has been a crisis associated with such credit?

11. What is there about rural workers, or peasants, which often makes it possible for the capitalist to pay them wages which are well below subsistence for city workers?

12. What do you think constitutes "subsistence wages" today, where you live?

13. Discuss the relationship between the representation LP - M - C(MS) . . . P. . . LP* and Critical Theory. What is . . . P . . . here? What is LP*? As . . . P . . . grows what would you expect to happen to LP*?

14. Evaluate the relative advantages and disadvantages of the two representations LP – M – C(MS) and LP – M – C(MS) . . . P . . . LP*. Does it make sense to you to assert that one represents the working class point of view and the other the capitalist's? Why, or why not?


1 Ibid., p. 270.

2 The examples of peonage given by Marx are in Mexico and Romania. As noted in my commentary on Chapter 29 , after the Civil War in the United States, a great many ex-slaves found themselves trapped in sharecropping and exactly the kind of debt peonage Marx describes in this chapter, despite the clause in the Thirteenth Amendment barring involuntary servitude as well as out-and-out slavery.

3 Capital, Vol. I, p. 273.

4 Ibid., p. 274.

5 Ibid., p. 275.

6 See John Locke, "On the Poor Law and Working Schools" (1697), in H. R. Fox Bourne, The Life of John Locke, vol. II (1876), London: Henry S. King & Co., 1876, pp. 377-391. There were a few exceptions, such as the schools that the textile manufacturer and reformer Robert Owens (1771–1858) created for his own workers' children under ten years of age, to discipline and train them for future work.

7 This use of terms is consistent with the way Marx uses the term reproduction in Part VII, Chapters 23-25 where he analyzes the reproduction of the class relationship as a whole under the rubrics of “simple reproduction” and “expanded reproduction” or “accumulation.”

8 Capital, Vol. I, p. 274.

9 While “pay” is often interpreted narrowly in terms of the direct payment of wages and salaries, the value that capital must consecrate to the reproduction of labor-power should be grasped to include all value diverted from otherwise investible revenue to support the process. In Marx’s time there were few employers like Robert Owens who created schools for working-class children. But after the Civil War and into the early 20th Century, capitalists became deeply involved in creating private schools, and lobbying for the creation of public-school systems, especially in the largely agrarian southern states, to create a whole new generation of workers—from low-paid manual workers to salaried professionals—better prepared for work in modern industry. In the case of public schools, capitalists sought, from the beginning, to shift the burden of payment onto working-class taxpayers, undermining the value of their wages and salaries. Some capitalists have also profited directly from 1) the building of public schools and their purchase of textbooks and other equipment, 2) the building of for-profit operations, e.g., charter schools, technical training schools and youth detention centers.

10 Marx's critique of the limits to Smith's analysis can be found in Volume I of the three volumes of Theories of Surplus Value, MECW, Vol. 31, pp. 7-31. This analysis by Marx of the distinction between the "productive" labor of waged workers employed by capitalists and the "unproductive" character of other kinds of labor produced a long and strange legacy. Not only have debates raged among Marxist theorists about what labor is and is not "productive," but they have resulted in such bizarre phenomena as the refusal of the Soviet state to include "services" in its Material Product System accounting because "service" labor was judged to be unproductive.

11 Obviously, unwaged housewives have to be supported out of their husband's wage or salary, but such support generally costs far less than that required to hire someone to perform the same work.

12 I first worked out this circuit while researching some issues in public health. See the Appendix to “Malaria, the Politics of Public Health and the International Crisis”, Review of Radical Political Economics, vol. 9, issue 1, April 1977, pp. 96–100.

13 Dynamically, the degree of resentment and anger fluctuates with changes in income. Losing a good job with access to decent medical care or gaining some increase in income and health but still at much lower levels than others, can both be sources of discontent. In his time, Marx noted that job loss and wage reductions associated with economic crises often spurred worker uprisings. The latter case was noted by economists and political scientists studying “development” in the Global South. They saw how positive changes, e.g., higher income or access to education, often provoked the demand for even faster improvement and discontent when it was not forthcoming

14 As you will find in Chapter 15, when the value of consumer goods fall, capital has sometimes sought to arrogate to itself all of the gains of increasing productivity. There is, however, no guarantee of success in such endeavor, so the distribution of the fruits of productivity gains has always been decided by the balance of power between workers and capital.

15 You will find a longer discussion of this phenomenon in my commentary on Chapter 10 where Marx returns to adulteration.

16 The kinds of products that he cites are almost always physical objects. As will become dear later, he also recognizes that some commodities are not "objects" in the usual sense, but services that exist only in the kinds of work being done.

17 In the microeconomic analysis of the firm, such termination as the result of insufficient surplus-value/profit, is called the "shut-down point." Indeed, most commodities have a "life cycle;" they are produced, find a profitable market for a while, but eventually demand dwindles, profits decline, and their production is terminated. The intentional shortening of that life cycle—in favor of more profitable substitutes—is called "planned obsolescence."

18 Jeremy Bentham (1748–1832), a social reformer who influenced Robert Owens, also embraced the idea that humans are always motivated by egotistical self-interest, even when they help others.