Initial interview on Marx’s “Wage, Labor and Capital”

The following is the text of an initial interview conducted by the National Democratic Online School with Jose Maria Sison, Emeritus Chairperson of the International League of Peoples’ Struggle, on Marx’s popular pamphlet “Wage, Labor and Capital”. The interview was posted online and further discussed by Prof. Sison on 17 May 2020, as Episode 1 of the “Marx and Labour Serye [Series] with Tito Jo”. The Marx and Labour Series, organized by Anakbayan Europa, is conducted as an online event broadcast and recorded on Facebook Live. Click here to watch Episode 1.

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1. Please explain labor power. How does it differ from labor? Also, please explain wages.

Jose Maria Sison (JMS): Labor power is the capacity of the workers to exert physical and mental effort in the production of goods for use and exchange. It creates the value of a commodity or in other words imparts value into a commodity. It is measurable in terms of hours within a work day or within longer periods of time. To obtain their means of subsistence, workers sell their labor power to the employers under formal or informal terms of employment for which the employers pay wages to the workers. 

The word labor refers to the activity by the workers to produce commodities, which are goods for use and exchange. It is sometimes used interchangeably with the phrase labor power. Economists before Marx had previously used labor in the general sense of value-creating activity or work by the working class. But labor power is the more precise term to underscore its measurability, as average socially necessary hours of labor to make a certain good. 

Even Marx used the word labor, instead of labor power, in his original 1849 articles in the Neue Rheinische Zeitung which Engels put together, edited and published in 1891 as a pamphlet under the title “Wage Labor and Capital”. On the basis of the later writings of Marx, who adopted labor power as a more precise term, Engels replaced the word labor with the phrase labor power in the pamphlet.

2. How does Marx’s explanation differ from that by classical economists?

JMS: The classical economists like Adam Smith and David Ricardo acknowledged labor as the creator of new material values in the production of commodities or goods for exchange in the market at certain prices through the mediation of money. Both economists asserted that units of different goods can be exchanged according to the amount of labor used in producing them. He stressed the mutuality of interest between the capitalist and the workers. 

David Ricardo was well-known for putting forward and elaborating the labor theory of value. He said that the value of a good is proportional to how much labor was required to produce it, including the labor required to produce the raw materials and machinery used in the process. He did not pay attention to the contradictory interests of the capitalist and the workers in the process of production.

Marx pointed out that the value of a commodity can be objectively measured by the average number of labor hours socially necessary to produce that commodity and went beyond Ricardo and other classical economists by demonstrating that the capitalist pays wages that are equivalent only to a small part of the total value created by the workers but the capitalist appropriates such total value and draws his profit from the surplus value beyond the wages that he paid to the workers.

In effect, the capitalist pays wages which may be called paid labor and which covers the costs of their subsistence but makes him work longer in a work day to obtain surplus value. The greater part of the total value beyond what is paid labor is unpaid labor or in other words surplus value from which the capitalist gets his industrial profit, the interest for paying the bank and rent for paying to the landowner. The theory of surplus value to explain capital accumulation and class exploitation is a distinct contribution of Marx in political economy.

3. Does the worker have interest in the rapid growth of capital, as it will improve their conditions? In Europe, for example, most workers get certain benefits in addition to their salary per hour, like for example vacation pay.

JMS: Up to a certain point, the capitalist and the workers depend on each other for their existence and have a measure of mutual benefit in the rapid growth of capital. The capitalist needs the workers to create new material values for the purpose of appropriating the surplus value and accumulating capital. The workers need the capitalist to get wages as payment for their labor power. Thus, they get their means of subsistence.

When industrial production grows, the capitalist is sure to increase his profits and accumulate capital until the profit rate tends to fall and the crisis of overproduction appears as a result of competition among the capitalists and the increase of constant capital (equipment and raw materials) against the variable capital for wages. While business is good for the capitalist, the wages in nominal and real terms do not necessarily rise, unless there are unions strong enough to demand wage increases.

Under conditions of rapid growth, profit-taking and accumulation of capital in the form of more equipment and raw materials, the proportion of wage payments decreases in relation to capital accumulation. The higher productivity due to the improvement of the means of production, the further division of labor and even the upgrading of the productive skills of the workers will tend to reduce the need for more labor power and thus the capitalist can make the workers compete for jobs at lower wages.

Under conditions that there are strong proletarian political parties and trade unions that make demands, the capitalist class can make concessions to the workers under their collective pressure. It can even increase both nominal and real wages, create a labor aristocracy or even boast of a welfare state, especially because of superprofits from colonies, semicolonies and dependent countries. But when the communist and working class movements weaken or even fade away, the workers are subjected to escalating levels of exploitation under the neoliberal policy of unbridled greed.

4. The analysis of Marx on wage labor and capital came from the demographics of workers during the 1800s, it centralizes on production, factories, and manual laborers. The rise of the corporate industry for example call center agents, BPO’s etc. made changes to the numbers of the working class. How does Marx’s analysis on wage labor, and capital still apply today?

JMS: The analysis and teachings of Marx on wage labor and capital remain valid from the time of electro-mechanical and chemical processes and extremely long hours of work in the 19th century to the current period of so-called information technology whereby production, communications and distribution are speeded up.

The answer is very simple. The hardware (the means of production) owned by the capitalist class in the past and in the present cannot in the first place be created and subsequently cannot operate without workers in social production and exchange of commodities. No matter how high the technology is, the workers are needed to operate the equipment, process the raw materials and put together components in the course of social production. Even robots need to be created, operated and maintained by workers.

The total number and proportions of blue collars and white collars may change by whatever measure but they can never be outnumbered by the capitalists whose ideologues and propagandists always try to minimize the number and crucial importance of wage-earning workers in general by classifying the white collar workers as non-worker salariat and giving them the illusion of being middle class and flattering them as more brainy than the supposedly muscle-flexing blue collars.

White collar workers, including professionals, technicians, office clerks and call center agents earn their means of subsistence by selling their labor power to the employers and rendering services by using socially necessary average labor time. As in the case of blue collar workers, the capitalist employer takes into consideration the wear and tear of equipment and the consumption of office supplies and maximize the surplus value he can get from the total value created on top of the wages he must pay to the employees.

Both blue collars and white collars belong to the proletariat, receive wages for repetitious and stressful work and do not live on dividends like their capitalist employers or on high salaries like corporate and government executives. As higher technology and the education and training of workers rise and thus increase productivity, requiring lesser time to produce more goods and services for society, there is no reason why the workers shouldn’t enjoy lesser working hours, get a rising income and have more time for their educational and cultural satisfaction and development.

Higher technology is not an instrument or argument for minimizing the number and importance of the workers and maximizing the number of the capitalists, managers and hangers-on. It is rather an instrument and reason for demanding, fighting for and realizing socialism. Why should it be an instrument for the biggest capitalists comprising not even 1 per cent of the population to rapidly increase their profit-taking and capital accumulation, thin out even the so-called middle class and cause high rates of unemployment, decreasing wage incomes and worsening conditions of mass poverty.

It is extremely cruel and barbaric of the capitalist class to use the ideology and policy of neoliberalism to turn higher technology against the 99 per cent of the population (the proletariat and the rest of the people) and dispossess them of the social wealth that they create at a faster rate with higher higher productivity. It has always been unjust that the capitalist class appropriates as its capital congealed or dead labor against living labor. We should not be misled by the notion that capitalists deserve their profit-taking and capital accumulation by adopting and using higher technology from scientists, engineers and inventors. The capitalists realize their profits and capital accumulation by exploiting the workers in the course of mass production of commodities, including high tech commodities.

5. How does wage labor and capital apply to the Philippine agricultural setting?

JMS: There are two types of farm workers in the Philippines. The overwhelming majority of them are seasonal and still belong to the poor and lower middle peasant families who are either tenants that pay rent to traditional landlords or who are owner-tillers of land which do not yield sufficient income for family subsistence. They do various types of farm work for the traditional landlords, for the rich and upper middle peasants and for the crop-exporting plantations of corporations. For the sale of their labor power, they receive wages in the form of cash or in kind, especially if in the form of staples like rice and corn which can be stored for family consumption.

The other type of farm workers consists of those who are employed in the export-crop plantations and belong mainly to the relatively stable corps of farm workers who operate the farm machines and do related jobs like warehousing and some agricultural tasks done mainly by hand. On a seasonal basis, there are farm workers who still belong to poor and lower middle peasant families and who come to the plantation from the vicinity or even from another island to augment the year-round farm workers in the plantation, sign up with labor contractors and get wages in exchange for their labor power.

Since commodity production became prevalent from the middle of the 19th century in the Philippines due to the exchange of products between town and countryside, between areas with different kinds of crops and due to foreign trade, the mercantile type of capitalism burgeoned, with the growth of the native comprador bourgeoisie in cities and of merchant usurers and rich peasants in the countryside. Even landlords could not avoid dealing with the merchants or they themselves engaged in merchant operations or in the first place they had risen from the ranks of rich peasants and merchant-usurers. Such is the basis of the hyphenated comprador-landlord class.

In the absence of heavy and basic industries to lead a comprehensive industrial development, the Philippines remains on the whole agrarian and semifeudal. It is still heavily dependent on agriculture and the most numerous class is the peasantry, especially the poor and lower middle peasants. However, their number is being statistically understated by recognizing only the family head as peasant or farmer and counting out of the peasant class those who do seasonal farm work for others or do seasonal odd jobs in the mining and logging areas or in the urban slums. The importance of agriculture and peasantry is also minimized by the fact that their output is understated because a great part of it (crop share) is consumed by the peasant family that produced it or a part of it is traded within the village. The landlords do not report to the state what their tenants actually produce. 

At any rate in the entire semi-feudal economy of the Philippines, the comprador big bourgeoisie is the wealthiest and most powerful class. It is the principal trading and financial agent of the foreign monopoly firms and symbiotic partner of the landlord class. It can be singled out as the ruling class in the country. It holds the biggest amount of capital because it owns or controls the biggest banks, trading firms, export-crop plantations, mining, semi-manufacturing, food and beverage processing, public and private construction, real estate and tourist firms and other enterprises that thrive on conditions of underdevelopment and liberalized investments, trade and finance.

Such enterprises are dependent on the export of raw materials and semimanufactures and the import of capital goods and consumer manufactures and on raising the tax burden at the expense of mass consumers and the domestic and foreign tax burden in order to cover the ever growing budgetary and trade deficits. The tentacles of the comprador big bourgeoisie extend directly and through intermediaries by lending money to and collecting payments from both big traditional and corporate landowners down to the level of the local merchant-usurers and rich peasants who prey on the poor and middle peasants due to the costly imported inputs, like certain tools, genetically modified seeds and agrochemicals. ###