Chapter 17: Changes of Magnitude in the Price of Labour-Power and in Surplus-Value

Outline of Marx’s Analysis


The title of this chapter announces a transition from value analysis to money by making clear that the value of labor-power will be discussed in terms of its price. Price, as we saw in Chapter 1, is the money expression of the value of a commodity, in this case of the value of labor-power. In this chapter, Marx reiterates his analysis of past chapters in terms of changes in both the value and the price of labor-power and notes how changes in price may differ from changes in value. In passing from analysis in terms of value to one in terms of money, Marx must, and does, take into account changes in the real value of money wages, e.g., caused by a change in the price of consumer goods. Therefore, the price of labor-power may not equal its value.

Throughout this analysis, the price of labor-power can be assumed to be wages, in as much as money wages were predominant over other expressions of the value of labor-power in the period in which Marx was writing. (As opposed to wages in kind, salaries, commissions or government payments to the unemployed or the poor.)

While the reiteration of previously explained material has often caused this chapter to be passed over as pure pedantry, there are two reasons for its close study. First, thinking of the value of labor-power in terms of its price, its monetary equivalent, lays the groundwork for Part VI, Chapters 19-22 on wages. Second, among familiar words and phrases there are also politically important points well worth repetition.

The first of these is his highlighting of how, in the dynamic of capitalist development, despite the existence of some zero-sum relationships where one class can benefit only at the expense of the other, there are situations in which the material situation of both can be improved. The most important of these being when a rise in the productivity of labor results, to use modern terms, in an increase in the size of the pie being produced. When the pie/output grows, it is at least possible for both workers and capitalists to get more of what they want: means of consumption and life for workers, means of production to impose more work for capitalists. Marx writes that it is “possible that owing to an increase in the productivity of labor both the worker and the capitalist may simultaneously be able to appropriate a greater quantity of means of subsistence [or of means of production] without any change in the price of labor-power or in surplus-value.”(1) The same mutual benefit is possible with increases in the length and intensity of the working day; where more is produced, more could potentially be shared. In this second case, because longer and/or more intense working hours use up workers’ energy faster, any increase in real consumption requires an excess over the necessary compensation for the accelerated wearing out of workers. But it is at least possible for the increase to be large enough.

The importance of these observations is they show how his theory is perfectly compatible with historically observed increases in standards of living among some workers, even as others are thrown into poverty and pauperism. It is also compatible with, and indeed predates, the recognition by neoclassical economists (from at least Alfred and Mary Marshall on) that increases in wages can go hand in hand with increased profits.(2) This was the reality on the basis of which John Maynard Keynes built his theory of how capitalist development could be socially progressive, i.e., one in which growing profits and investment were stimulated by growing wages and benefits.(3) In the process, he overthrew the traditional business view that any increase in wages would undermine profits and therefore had to be resisted by all means possible—including violence when necessary.

Under these circumstances, Marx also points out how the degree to which the fruits of higher productivity and more work are shared depends in large part upon the balance of class forces, i.e., on the struggle between workers seeking to share in increases in the social wealth resulting from increased productivity and the efforts by capitalists to arrogate all increases to themselves. “The new value of labor-power”, Marx writes, “depends on the relative weight thrown into the scale by the pressure of capital on the one side, and the resistance of the workers on the other.”(4) In the wake of the Russian Revolution and of World War I, Keynes pointed out that the English working class would no longer accept reductions in real wages and was well enough organized to insist on rising real wages. The alternative to provoking a general strike by trying to lower wages, he suggested, was raising productivity (either by shutting down low-productivity operations or by investing in new technology) that could make higher wages possible with no loss to capitalists.

Although Keynes’ observations and proposals were made in Britain, similar recognition in the United States underlay the acceptance and legalization by the Roosevelt Administration of industrial unions and collective bargaining. Those changes forced capitalists in major industries, such as motor vehicles and mining, to recognize unions, bargain with them collectively and cut “productivity deals” in which workers were allowed to share in the fruits of rising productivity in exchange for cooperation in the introduction of new technology that made that rise possible. Although such deals were written into union-industry contracts, how the agreements worked out in practice continued to depend on struggle and the balance of class power on the shop floor and in the pits.

Marx draws our attention to two cases. The first was during the period of the Napoleonic Wars, 1799–1815. He cites 1799 presumably because it was in November of that year that Napoléon Bonaparte (1769–1821) seized power—ten years after the French revolution. Actual war between the British and French governments began in 1803 as Bonaparte’s armies began to conquer much of Europe. He was finally defeated at Waterloo in 1815 after his disastrous withdrawal from Moscow and despite Britain’s defeat in the War of 1812 with the United States. During those years of warfare, the ability of England to import grain from the European continent was curtailed—both by the French government’s closing of its territory to British trade and by the British naval blockade of French ports.(5) As a result, the British economy was forced to rely on less productive local agriculture, especially of corn (the English term for wheat and other grains requiring grinding). The resulting increase in the price of bread for workers helped drive them to accept the longer, harder hours that Marx cites. The increased price of grain and bread not only reduced real wages, but increased ground rents profiting landlords. This situation was prolonged after the war by so-called Corn Laws, enacted in 1815, putting tariffs on imported grain. The continued high price of grain and bread intensified class conflicts and led to the famous debate between Malthus, who defended the tariffs as vital to national security and Ricardo who critiqued them as harmful to industrial development because they diverted income from profits that could be invested to rents that went largely to luxury consumption by landlords. Capitalists mounted a sustained movement, enlisting workers, to end the Corn Laws, increase wheat imports, and lower the price of bread, an effort that finally succeeded in 1846. Of course, they didn't mention to the workers their plans to lower wages once the price of bread dropped!

The second of the two cases, involving a shortening of the working day but increased intensity and productivity, became dominant in the period of the real subsumption of labor to capital once workers organized themselves effectively enough to force down their hours of work. This forced capitalists to resort to relative surplus-value strategies. In other words, the history analyzed in detail in Part IV, Chapters 12-15.

What is interesting in Marx’s treatment here, is how he draws from that analysis implications for the possibilities beckoning from a future beyond capitalism. In such a future world, he argues, those dreams of Aristotle that he evoked in Chapter 15 could finally be realized. Freed of the capitalist mandate to order society through imposed work, rising productivity could be converted into more and more free time. His brief discussion here echoes Engels’ lectures at Elberfeld two decades earlier, where he blasted all the wasteful forms of work that capitalism requires, e.g., police and juridical protection of private property, finance, a military-industrial complex, and so on, imagining all those wasting their time in such activities changing occupations and sharing a declining burden of actually useful labor.(6) No more separate leisure class, freed from work by the labor of others, but an equal sharing by all in less and less work and more and more leisure. Such a future, Marx argues, would allow “the free intellectual and social activity of the individual”.(7) Here Marx is also echoing his own words from the Grundrisse notebooks a decade before. There he wrote, “The saving of labor time [is] equal to an increase of free time, i.e., time for the full development of the individual, which in turn reacts back upon the productive power of labor as itself the greatest productive power.”(8)

A final note: in the midst of pointing out the potentialities created by raising productivity, Marx recognizes how the development of individuals, both intellectual and social, changes their aspirations and therefore their needs and desires. As a result, the amount and diversity of labor required to provide the means for satisfying those needs and desires grows. Therefore, “what is now surplus labor would then count as necessary labor, namely the labour which is necessary for the formation of a social fund for reserve and accumulation.” (9) In a post-capitalist world, clearly “accumulation” would no longer involve the expanded reproduction of antagonistic class relationships, but rather the growth in all those elements necessary to satisfying changing aspirations. Here we have an answer to an objection long posed by mainstream economists to Marx’s theory of surplus labor/value and exploitation within capitalism. “Would not”, they have argued, “people in a post-capitalist society still need to do more work than is required to meet their immediate needs in order to create the wherewithal to meet future needs?” Yes, but in such a society, as Marx says here, such extra work would not be “surplus-value” because it would not be dedicated to the expanded imposition of social control via more and more work.


1 Capital, Vol. I, p. 659. No change in nominal or money wages, but an increase in real wages because the money buys more due to lower prices of consumption goods.

2 Neoclassical microeconomics allows wage increases to be compatible with increases in profit as long as the marginal productivity of labor rises.

3 In Keynesian macroeconomics, rising wages increase consumer demand, which, ceteris paribus, induces investment and greater output.

4 Capital, Vol. I, p.659.

5 For vivid fictional accounts—often based on real historical documents—of the British blockade from France's northern ports along the Channel to Gibralter and ports along the Mediterranean coast, see the Napoleonic War novels of C. S. Forester and those of Patrick O'Brian, and the films based upon them. Forester's novels provided the basis for a 1951 film Captain Horatio Hornblower starring Gregory Peck and an ITV and A&E TV series Hornblower (1998–2003) starring Ioan Gruffudd. O'Brian's Aubrey–Maturin novels provided the material for Master and Commander: The Far Side of the World (2003) starring Russell Crowe and Paul Bettany.

6 See his two speeches, delivered in February 1845 in MECW, Vol. 4, pp. 243–264.

7 Capital, Vol. I, p. 667.

8 Grundrisse, p. 711.

9 Mainstream economists, apologists as they are for capitalism, argue that what is produced in capitalism is always a function of people's needs and desires, as manifested in how they spend their money. While making that argument, they completely ignore not only all the ways in which capitalists manipulate need and desire to create more opportunities for imposing more work, but also all of those kinds of work that both Engels and Marx deplored as superfluous to a society freed of capitalist domination.