Wage-labor and capital (Karl Marx)

[SergeNubret]

Hello everybody!
Im compleatly new to socialism and communism and wish to learn more! So please explain a very easy way if that is possible!
(Note: Im not English so some words makes me lost in this book)
I have started reading this book and I have some touble picturing myself how this is and how this would work.

"BY what is the price of a commodity determined?
By the competition between buyers and sellers, by the relation of the demand to
the supply, of the call to the offer. The competition by which the price of a
commodity is determined is three-fold.
The same commodity is offered for sale by various sellers. Whoever sells
commodities of the same quality most cheaply, is sure to drive the other sellers from
the field and to secure the greatest market for himself. The sellers therefore fight
among themselves for the sales, for the market. Each one of them wishes to sell, and
to sell as much as possible, and if possible to sell alone, to the exclusion of all other
sellers. Each one sells cheaper than the other. Thus there takes place a competition
among the sellers which forces down the price of the commodities offered by them.
But there is also a competition among the buyers; this upon its side causes the
price of the proffered commodities to rise."

Does this mean that the cheapest product, becomes the most expensive if they after a while get the most buy'ers?
Not sure if I got this right?

I am also sure I will be needing help later on so I will just keep on posting question about my problems further down!
Thank you!

[SergeNubret]

Asked my sociology teacher, understood it now =)

Although I have a few other questions;
". Wages will now rise, now fall,
according to the relation of supply and demand, according as competition shapes
itself between the buyers of labor-power, the capitalists, and the sellers of laborpower, the workers"
How is wages decided my the relations of demand and supply?
If there is a lot of one commodity, will wages rise because workers have to make more, or vice versa?
Did not understand this one :/

[Blake's Baby]

Yes, it does mean that. If Capitalist A can offer his goods very cheaply, his competitors will go out of business. When there are no more competitors, Capitalist A can charge whatever he likes - this is called a monopoly.

In capitalism, you can for any product in any place have more buyers than sellers, or more sellers than buyers, or the two can be equal. More sellers than buyers means prices fall, more buyers than sellers means prices rise.

[Tanner]

Basically Marx is just describing "supply and demand" price determination. It's one of the more simple economic concepts that can be summed up in four laws:
If demand increases and supply remains unchanged, a shortage occurs, leading to a higher equilibrium price.
If demand decreases and supply remains unchanged, a surplus occurs, leading to a lower equilibrium price.
If demand remains unchanged and supply increases, a surplus occurs, leading to a lower equilibrium price.
If demand remains unchanged and supply decreases, a shortage occurs, leading to a higher equilibrium price.

I would link you to the Wikipedia article for some more information but I don't have the required postcount, sorry.

[SergeNubret]

So workers get paid before they actually do the job? I think I read yesterday that the capitalist set aside money for the workers, then they do the job and the capital they produce then goes to the capitalist?
Is this right?

[SergeNubret]

"Let us suppose the most favorable case: if productive capital grows, the demand
for labor grows. It therefore increases the price of labor-power, wages"
Do workers get higher wages when the capital in a company grows? Even if the company get more workers?

[Blake's Baby]

Asked my sociology teacher, understood it now =)

Although I have a few other questions;
". Wages will now rise, now fall,
according to the relation of supply and demand, according as competition shapes
itself between the buyers of labor-power, the capitalists, and the sellers of laborpower, the workers"
How is wages decided my the relations of demand and supply?
If there is a lot of one commodity, will wages rise because workers have to make more, or vice versa?
Did not understand this one :/

Odd, this post wasn't there yesterday when I replied to your first post.

When he talks of 'supply and demand' here, he mains 'supply and demand of labour', because labour(-power) is also a commodity. If there is a lot of unused labour (many people unemployed for instance) then labour will be cheap, Workers will be desperate and capitalists will be able to easily replace anyone who asks for higher wages. When labour is scarce, when many capitalists are chasing a small number of workers (perhaps the job needs particular technical skills), wages will be high.


So workers get paid before they actually do the job? I think I read yesterday that the capitalist set aside money for the workers, then they do the job and the capital they produce then goes to the capitalist?
Is this right?

I don't know about any place you've ever worked but I've never been paid in advance.

The capitalist pays the worker before the goods the worker has made have been sold - sometimes; but not before the goods have been made.


"Let us suppose the most favorable case: if productive capital grows, the demand
for labor grows. It therefore increases the price of labor-power, wages"
Do workers get higher wages when the capital in a company grows? Even if the company get more workers?

No. But the workers in the whole economy might. If the productive capital of a company grows, then the company would usually expand production. Even if it doesn't, the company's competitors will be looking at the market and recognising that the company is doing well. There must be a reason for this, and the likelihood is that the market is working in favour of the company. The company gets a good return because the cost of producing the goods is much less than the return - in other words, there is an eager market for these goods.

Someone (either the original producer or a competitor, and most likely the original producer and several competitors) will all try to expand production. This will result in companies bidding against each other for skilled workers who are trained in this sort of production. This in turn will drive up wages for those workers - suddenly, they are in short supply and as a result the commodity that is their labour-power is worth more on the labour-market.

[cantwealljustgetalong]

A comrade on the forum has produced a study guide (http://www.revleft.com/vb/wage-labor-and-t175780/index.html?p=2524296#post2524296) for this pamphlet that may help you answer your further questions!

[SergeNubret]

Thank you for your answar Blake's baby!
Cantwealljustgetaloing: I have looked into then and they were good, but not exactly the things I was aking for =)

[Comrade #138672]

Basically Marx is just describing "supply and demand" price determination. It's one of the more simple economic concepts that can be summed up in four laws:
If demand increases and supply remains unchanged, a shortage occurs, leading to a higher equilibrium price.
If demand decreases and supply remains unchanged, a surplus occurs, leading to a lower equilibrium price.
If demand remains unchanged and supply increases, a surplus occurs, leading to a lower equilibrium price.
If demand remains unchanged and supply decreases, a shortage occurs, leading to a higher equilibrium price.

I would link you to the Wikipedia article for some more information but I don't have the required postcount, sorry.I do not think that he is 'just' describing supply and demand. What he is describing is more fundamental. Supply and demand can be derived from the labour theory of value, but not the other way around.

[SergeNubret]

"Consequently, it appears that the capitalist buys their labour with money, and that for money they sell him their labour. But this is merely an illusion. What they actually sell to the capitalist for money is their labour-power. This labour-power the capitalist buys for a day, a week, a month, etc. And after he has bought it, he uses it up by letting the worker labour during the stipulated time. With the same amount of money with which the capitalist has bought their labour-power (for example, with two shillings) he could have bought a certain amount of sugar or of any other commodity. The two shillings with which he bought 20 pounds of sugar is the price of the 20 pounds of sugar. The two shillings with which he bought 12 hours' use of labour-power, is the price of 12 hours' labour. Labour-power, then, is a commodity, no more, no less so than is the sugar. The first is measured by the clock, the other by the scales.

Their commodity, labour-power, the workers exchange for the commodity of the capitalist, for money, and, moreover, this exchange takes place at a certain ratio. So much money for so long a use of labour-power. For 12 hours' weaving, two shillings. And these two shillings, do they not represent all the other commodities which I can buy for two shillings? Therefore, actually, the worker has exchanged his commodity, labour-power, for commodities of all kinds, and, moreover, at a certain ratio. By giving him two shillings, the capitalist has given him so much meat, so much clothing, so much wood, light, etc., in exchange for his day's work. The two shillings therefore express the relation in which labour-power is exchanged for other commodities, the exchange-value of labour-power."

I have read this almost 10 times now, I feel I almost understand it! but not fully yet.
Can someone please make me an example with dollar, instead of shillings and use 10 hours or something? Just so that I can look at it from another perspective from someone who understands it!

[SergeNubret]

"Let us take any worker; for example, a weaver. The capitalist supplies him with the loom and yarn. The weaver applies himself to work, and the yarn is turned into cloth. The capitalist takes possession of the cloth and sells it for 20 shillings, for example. Now are the wages of the weaver a share of the cloth, of the 20 shillings, of the product of the work? By no means. Long before the cloth is sold, perhaps long before it is fully woven, the weaver has received his wages"

"The capitalist, then, does not pay his wages out of the money which he will obtain from the cloth, but out of money already on hand"

So a capitalist gives or set aside money for a worker, BEFORE a profit is made from that product?
Please answar

[Left Voice]

The basic point is that the worker is not being paid based on what the product was sold for, but based on a fixed wage that the capitalist gave to the worker. The surplus goes to the capitalist, thus the worker does not receive the full fruit of their labour.

Whether or not the worker is paid before of after profit has been made does not change the paradigm that the worker is paid a wage based one the commodity value of the labour, not based on the profit of the product.

[Comrade #138672]

"Let us take any worker; for example, a weaver. The capitalist supplies him with the loom and yarn. The weaver applies himself to work, and the yarn is turned into cloth. The capitalist takes possession of the cloth and sells it for 20 shillings, for example. Now are the wages of the weaver a share of the cloth, of the 20 shillings, of the product of the work? By no means. Long before the cloth is sold, perhaps long before it is fully woven, the weaver has received his wages"

"The capitalist, then, does not pay his wages out of the money which he will obtain from the cloth, but out of money already on hand"

So a capitalist gives or set aside money for a worker, BEFORE a profit is made from that product?
Please answarThat is correct. He pays the wage-worker money he extracted from previous labour.

[Q]

So a capitalist gives or set aside money for a worker, BEFORE a profit is made from that product?
Please answar

From the capitalist's point of view, yes. He buys in labour-power (which Marx calls variable capital or living labour) to work on and with the other resources, like machines and input sources (which Marx calls constant capital or dead labour). Via this labour the worker adds value to the product. Living labour is sucked up by dead labour in order to increase value, Marx likens this to a vampire. The point of capital is to increase itself, pursue ever increasing value.

From the perspective of the worker, his work is underpaid by definition. He doesn't own his labour power as long as he works for his boss. Sellers never own the use value of their products (in this case labour power, or better, the potential to labour), it is always owned by the buyer. The worker is only compensated, he only gets the value of the commodity labour power, which, under capitalism, is (on average) equal to the value that is needed to replenish that capacity to labour (food, sleep, housing, clothing, raising children for the next generation of workers, etc).

Does this explain?

Once you're done with that pamphlet I wholeheartedly recommend Capital. It may seem daunting at first, but remember that it was written to be easy to understand, so the whole worker class could, potentially, read it and understand how capitalism works and why.