Marx 24

Karl Marx
- Exploitation -
Karl Marx
• 1818-1883
• Born in Trier, Germany
• Son of a lawyer
• Studied law in Bonn and then Philosophy in
Berlin and Jena
• Editor in chief of an oppositional newspaper
• Had to leave Prussia and moved to Paris, then
to Brussels, and finally to London
• Worked as a journalist, but was also
dependent on support from Friedrich Engels
(whose families owned textile factories in
England and Germany)
• Published the Communist Manifesto in 1848
(with Engels)
• Died in exile in London
• Major economic work: Capital. Critique of
Political Economy, Vol. I-III (1867, 1885, 1894)
Capital (Vol I-III). Critique of Political Economy.
Original (primitive) accumulation
• Marx distinguishes between original (primitive) accumulation and capitalist
accumulation
• Original accumulation depicts a process that predates capitalism and includes often
violent processes of dispossession and appropriation
“[F]rom this original sin [original accumulation] dates the poverty of the great majority who, despite all their
labor, have up to now nothing to sell but themselves, and the wealth of the few that increases constantly, although
they have long ceased to work.”
• Examples include enclosures and the plundering of the colonies
“The discovery of gold and silver in America, the extirpation, enslavement and entombment in mines of
the aboriginal population, the beginning of the conquest and looting of the East Indies, the turning of Africa into a
warren for the commercial hunting of black-skins, signaled the rosy dawn of the era of capitalist production.”
• David Harvey: Accumulation by dispossession
Capitalist accumulation
• Feudalism: peasants (serfs) lease land and are in turn required to give part of
the output to the landlord
• Capitalism: capitalists hire workers to work on their land or in their factories;
in exchange workers receive a wage
• Because the violence took place in the prehistory of capitalism, capitalist
accumulation can appear as the voluntary exchange of free parties – the
capitalist and the worker
“For the conversion of his money into capital, therefore, the owner of money must meet in the
market with the free laborer, free in the double sense, that as a free man he can dispose of his
labor-power as his own commodity, and that on the other hand he has no other commodity for sale,
is short of everything necessary for the realization of his labor-power.”
Extended reproduction
• Simple Reproduction: Capitalists consume the entire surplus (profit)
C-M-C
C=Commodities
M=Money
• Extended Reproduction: Capitalist reinvest part of the

surplus in order to gain more profit
M-C-M’
• The satisfaction of human needs is only a byproduct
of the accumulation process
“Accumulate, accumulate! This is Moses and the Prophets!”
Exploitation I
• Marx (like Smith and Ricardo) believed that labor is the only
source of (monetary) value (all three are proponents of the
labor theory of value).
• Necessary labor: the labor that is needed to produce all the
goods and services consumed by the working class
• Surplus labor: The difference between the necessary part
and the actual of the workday
• Expressed in monetary terms, surplus labor (time) become
surplus value
Necessary
and surplus
Labor
Exploitation II
• Absolute surplus value: surplus value is increased trough the expansion of the
workday
Marx argues that capital, in its “were-wolf hunger for surplus labor . . . oversteps the merely physical
maximum bounds of the workday.” He further notes that “capital cares nothing for the length of life of
labor power. All that concerns it is simply and solely the maximum labor power that can be rendered
fluent in a workday. It attains this end by shortening the extent of the laborer’s life, as a greedy farmer
snatches increased produce of the soil by robbing it of its fertility”.
• Relative surplus value: surplus value is increased through the shortening of the
necessary part of the workday (chiefly through the intensification of work)
“The shortening of hours of labor creates, to begin with, the subjective conditions for the condensation
of labor.” Condensation leads to a “closer filling up of the pores of the workday” and a “heightened
tension of labor power.” As a result, the “denser hours of the ten hours’ workday contains more labor,
i.e., expended labor-power, than the more porous hours of the twelve hours’ workday.”
Absolute and
relative
surplus value
The role of machinery
Far from bringing about shorter workdays, new
machinery has a tendency to “sweep away every
moral and natural restriction on the length of the
workday.” However, the problem is not machinery
as such. The problem is the fact that the machinery
is owned by capitalists. In the hands of capital, “the
most powerful instrument for shortening labor
time, becomes the most unfailing means for
placing every moment of the laborer’s time . . .
at the disposal of the capitalist.”
Average
work hours
per worker
Average per
capita work
hours
Alienation
• Workers are not only exploited; they are also alienated
• The ability to imagine something, to plan it, and to carry out the plan using
tools and skills distinguishes human beings from animals
• The successful execution of a plan or the solving of a problem makes work
rewarding beyond monetary exchanges
• The division of labor and the use of machinery comes with a loss of control
and de-skilling (making worker more easily replaceable)
• The result is what Marx calls alienation.
“Owing to the extensive use of machinery and to division of labor, the work of the proletarians has
lost all individual character, and consequently all charm for the workman. He becomes an
appendage of the machine, and it is only the most simple, most monotonous, and most easily
acquired knack, that is required of him.”
Class struggle
• From Marx’s explanation of surplus labor follows that there is an inherent conflict of
interest between workers and capitalists
• Workers want to limit the workday to necessary labor time; capitalists want to
expand it to increase surplus value, and subsequently, profit
“The capitalist maintains his rights as a purchaser when he tries to make the working-day as long as possible...
On the other hand, the peculiar nature of the commodity sold implies a limit to its consumption by the
purchaser, and the laborer maintains his right as seller when he wishes to reduce the working-day to one of
definite normal duration. There is here, therefore, an antinomy, right against right, both equally bearing the
seal of the law of exchanges. Between equal rights force decides.”
• The result is what Marx calls class struggle; individually workers have no chance
against capital; they only succeed when they act collectively
“[L]aborers must put their heads together, and, as a class, compel the passing of a law [introducing the
10-hour day], an all-powerful social barrier that shall prevent the very workers from selling, by voluntary
contract with capital, themselves and their families into slavery and death.”
Trade union
membership
is down to
10% in the
US
Crisis
• Fundamental contradictions following from the focus on profits rather than
the satisfaction of need (especially with regard to ecological limits)
• The pressure to increase profits causes a tendency of overaccumulation
(overproduction): In the race for the highest profits capitalists invest quickly,
building up capacity that eventually exceeds demand; the result is an
overproduction, fall in profits, and subsequently an economic crisis
• The tendency of the profit rate to fall: Increasing machines (constant capital)
means less workers (variable capital); but only workers create value.
• Counter-tendencies: intensification of work; depression of wages; reduction
of costs for constant capital (cheaper machinery)
Crisis
• Fundamental contradictions following from the focus on profits rather than
the satisfaction of need (especially with regard to ecological limits)
• The pressure to increase profits causes a tendency of overaccumulation
(overproduction): In the race for the highest profits capitalists invest quickly,
building up capacity that eventually exceeds demand; the result is an
overproduction, fall in profits, and subsequently an economic crisis
• The tendency of the profit rate to fall: Increasing machines (constant capital)
means less workers (variable capital); but only workers create value.
• Counter-tendencies: intensification of work; depression of wages; reduction
of costs for constant capital (cheaper machinery)
Dot.com
bubble
Nasdaq
The falling
rate of profit
Was Marx
right after
all?
Wage suppression and wage inequality
Lawrence Mishel: How automation and skill gaps fail to explain wage suppression
• The problem:
- Wages as share of GDP and of corporate income have been falling in the past
decades
- Wages of non-supervisory production workers have increased by 15% in the last 45
years (0.3% per year)
- While the bottom 90% of wage earners has seen small increases, the top 10% and
especially the top 1% have seen massive increases
• How can we explain this development?
- Skill gap: higher qualified workers win; lower qualified workers loose
- Automation: unskilled workers are replaced by computers/machines
- Class struggle: declining trade union organization and power
Falling wage share
Productivity gap and wage inequality
Wage suppression and wage inequality
Skill gap:
• The skill gap can’t explain the income gains of the top 1%; these are super-managers not
highly qualified scientists/engineers
• There was a college premium between 1980 and 2000, but it largely disappeared between
2000 and 2020 – and therefore not explain growing wage inequality in the last 2 decades
Automation:
• The share of college graduates (bachelor degree) in total employment increased
moderately from 20 to 25% in the last 2 decades
• 45 percent of recent college graduates work in jobs that don’t require a bachelor’s degree
Class struggle:
“The key dynamic undercutting a typical worker’s wage growth was a strengthening of
employers’ power relative to their white-collar and blue-collar workers.”
College premium
Demand for college graduates

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Karl Marx

• Extended Reproduction: Capitalist reinvest part of the

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