Alice Malone

Labour and Labour-Power (2023)

17 minutes | English | Marx & Engels



Why can’t capitalists treat workers better? Why do we get paid so much less than the value of what we produce with our labour? That capitalism exploits workers is obvious to anyone who has worked for wages, and Marx was not the first person to point it out. Utopian socialists like Robert Owen and Saint-Simon had written influential works on this theme decades before Marx’s Capital[1] and capitalism’s exploitation of workers was as obvious to workers then as it is to us now (if not more so). Marx’s contribution — the reason he has had such an impact on economics and politics — was, rather, his scientific description of how capitalism exploits workers.

It’s crucial to understand how capitalism works, both to mount strategic resistance against it and to put forward a plan to better organize the necessary labour that goes into a functioning society. [2] One area where discussions of what is to be done get murky is labour versus labour-power. These two terms are sometimes used interchangeably, but this elides something crucial: if labourers were paid for their labour instead of their labour-power, capitalism as we know it wouldn’t exist!

I want to look at what labour-power is, and also explain why Marx made such a big deal about the difference between labour and labour-power.

Capital and labour

Taking things apart and then putting them back together can teach us something about the whole. Textual analysis is no exception. I’ll use my professional skills as a statistician to support some of my claims regarding relationships between concepts in Capital[3] So, what does a data science “reading” of Capital tell us?

Let’s start by finding which words and topics recur. Removing common words like “the” and “is”, the 10 most common words Marx uses in Capital are:

It’s pretty interesting that a book so focused on labour is titled Capital! But this is precisely because capital is labour.

A premise of Capital, consistent with the work of earlier economists like Adam Smith, [4] is that the value of something is determined by the amount of labour that goes into it. [5] [6] Marx famously uses the example of linen and a linen coat: the coat is valued higher than raw linen because human labour went into turning the linen into a coat, thus rendering it more useful to (some of) us. [7] Of course, other things went into the linen coat too: other commodities like thread and buttons, etc. But wool and thread, or wood and buttons, are also differentiated by the labour that goes into processing them. [8] The means of production — the coat sewing machine in this example — are operated by the labourer but owned by the capitalist. But those machines were also purchased, and also have a value that is determined by the labour that goes into them. When you look at the whole, all capital is labour.

At the same time, however, labour and capital are complete opposites — bitter enemies in a centuries-long class struggle. Labour and capital meet on opposing sides of picket lines: workers versus business owners. Labour owns no property, and must therefore toil for rent and bread, while capital owns property and therefore doesn’t have to work at all. [9] Labour and capital are the two main characters of political economy, but in the way Marx tells their story, he does something different than his predecessors like Adam Smith:

[Capital] narrates the story of the economy from the point of view of both labour and capital. The purpose of this back-and-forth is not to give the same status to both, but to clearly illustrate the differences between them. In the final analysis, Marx privileges the subject-standpoint of labour, whereas capital is more of an object, the topic that labour comes to understand on the basis of its own interests. (…) Capital is, so to speak, a spin-off of [the traditional story of] political economy, one that allows us to identify with the hitherto invisibilized perspective of labour. [10] [11]

That “labour” occurs with more frequency than “capital” in a book titled Capital is meaningful. Capital is a story about how capital really comes from labour, about how labour is its true protagonist.

Surplus-value and labour-power

What about the other commonly occurring words in the top 10, like value, means and surplus? Many of them don’t have all that much meaning on their own, but occur in longer phrases: surplus-value, means of production, value form, exchange value, etc. What if instead of looking at individual words, we look which sets of two or three words occur most frequently?

The relative ranking of these phrases reveals something. To understand what the secret of capital really is, let’s look at the two most common ones: surplus-value and labour-power. We know, from looking around us, that people with a lot of money (M) can use that to make more money (M'). Insofar as money is a measure of wealth, however, this means that somewhere out there value — surplus-value — is being produced[12] But where?

We know it can’t just be from selling commodities for more than they’re worth. Our first instinct might be to imagine some seller out there is scamming some buyer. After all, if the coat-capitalist from earlier sells a coat for 10% more than the value of the coat to an ignorant buyer, he makes a profit of 10%. But the coat-capitalist in turn would have to go and buy linen to turn into more coats to sell. Operating on a similar logic, the linen-factory-capitalist could try to sell his linen for 10% more than it is worth. There’s no reason why every capitalist wouldn’t want in on this game. If this was really the method by which capitalists produced wealth, we’d expect the 10% profit the coat-capitalist was making to be eaten up by the inflated prices of the raw materials, resulting in no surplus-value at all. [13] Capitalist competition would enforce not M-C-M' but rather M-C-M: with his capital (M), a capitalist can buy a commodity (C) and then sell it for the same amount of value (M) — but he can’t create more value. So where does surplus-value come from, then?

There’s one particular commodity that does have the characteristic of being able to create more value than what it is bought for, and it has to do with labour. Just like there is a linen market, there is a labour market. But while there’s a hard limit on how many coats the coat-capitalist can make from some quantity he’s bought of linen, labour behaves differently. The reason for this is that as workers, we do not sell our labour to our employer, but our labour-power: our potential to perform labour. We agree to work for a certain number of hours per day (or days per year) in exchange for wages. With that contract finalized, our employer can consume the labour-power he has bought however he pleases, squeezing out as much labour as he can from it: sew coats faster, wait more tables, receive notifications in your evenings and weekends. Surplus-value is only possible because the value of the labour we put into the products we make is greater than the value of our labour-power.

That labour-power is the most common phrase in Capital — more common than surplus-value by more than a third — is again interesting, for a few reasons. First, this is the “secret” to capitalist accumulation: M-C-M'. If a capitalist paid for labour instead of labour-power, he would have only M-C-M. If a capitalist didn’t “contribute” by squeezing out extra labour from the labour-power he bought, again, he would have M-C-M: no surplus-value, no accumulation of capital. The more labour a capitalist can squeeze out of the labour-power he has bought, the more surplus-value he creates, and the more capital he accumulates. Furthermore, a capitalist that doesn’t extract as much surplus-value as he can will soon be out-competed by more exploitative capitalists. This is what “productivity” means in capitalism. [14]

Second, it’s interesting that Marx himself considered this concept, that surplus-value comes from the difference in value between labour and labour-power, to be one of his most crucial contributions to political economy, and a departure from previous political economists like Adam Smith:

Capital, therefore, is not only, as Adam Smith says, the command over labour. It is essentially the command over unpaid labour. All surplus-value, whatever particular form (profit, interest, or rent) it may subsequently crystallize into, is in substance the materialization of unpaid labour. The secret of the self-expansion of capital resolves itself into having the disposal of a definite quantity of other people’s unpaid labour. [15]

Engels deemed this innovation so critical that when issuing a posthumous reprint of Marx’s early work Wage Labour and Capital (1847), he made the rare editorial decision to modify it to reflect the discovery and present the text “approximately as Marx would have written it in 1891”:

My alterations centre about one point. According to the original reading, the worker sells his labour for wages, which he receives from the capitalist; according to the present text, he sells his labour-power. And for this change, I must render an explanation: to the workers, in order that they may understand that we are not quibbling or word-juggling, but are dealing here with one of the most important points in the whole range of political economy […]. [16]

Lenin also recognized the central importance of labour-power to an understanding of capitalism, issuing this very succinct definition:

Capitalism is that stage in the development of commodity-production in which labour-power, too, becomes a commodity. [17]

Far from being a coincidence of language, the relative frequencies of “labour-power” and “surplus-value” in Capital point to the importance of labour-power in explaining how capitalism works. [18]

From the perspective of labour

That Marx uses “labour-power” over “surplus-value” reminds us again of who the protagonist of Capital is: labour.

Labour thinks in terms of labour-power. As workers, we know the value of our labour-power: we sell it so that we can buy food and pay rent. We know how to use our labour-power: we become experts in the specific skills we use at our jobs. We also know (or should know) when our labour-power is being squandered to create value for shareholders rather than used to create things that add value to people’s lives. Labour-power is useful: through our labour we create the things we need or want, or solve the problems we face.

Capital thinks in terms of surplus-value. Capitalists must direct their capital to produce whatever commodities in whatever manner will produce the most surplus-value, or they’ll be out-competed by other capitalists. The type of labour that is performed and the exact commodities made by the labour-power are unimportant. Surplus-value is not useful: it does not create the things we need or want, or solve the problems we face. For that, we need labour.

If we know how to direct our labour, if capitalists can only make decisions that optimize for surplus-value and not for usefulness, aren’t we the ones who are best situated to decide how to use our labour-power? What do we need the capitalists for?

[1] See Chapter I (Utopian Socialism) of Friedrich Engels’s Socialism: Utopian and Scientific (1880). [web] 

[2] See Nia Frome’s “How is it to be done?” (2023) for how a rational application of political economics with the aim of beating capitalism converges on Actually Existing Socialism [web] 

[3] This field of data science, natural language processing (NLP), probably affects your daily life: it’s used to parse search queries and provide result summaries on search engines, it shapes social media feeds, and powers large language models (LLMs) like ChatGPT. 

[4] “The value of any commodity, therefore, to the person who possesses it, and who means not to use or consume it himself, but to exchange it for other commodities, is equal to the quantity of labour which it enables him to purchase or command. Labour therefore, is the real measure of the exchangeable value of all commodities.” — Adam Smith, Wealth of Nations, Ch. 5. [web] 

[5] Marx uses the term “socially necessary labour”: working slowly to stretch out how long it takes to finish a task does not create more value. 

[6] The most common criticism of this claim is based in the so-called “transformation problem” or the fraught relationship between values and prices, which is untangled by Ian Wright. [web] — N. F. 

[7] Karl Marx, Capital Vol. 1 (1867), Ch. 1. [web] 

[8] What about the wood for the buttons? “Nature is just as much the source of use values (and it is surely of such that material wealth consists!) as labor, which itself is only the manifestation of a force of nature, human labor power.” — Karl Marx, Critique of the Gotha Programme (1875), I. [web] 

[9] “In capitalist society, spare time is acquired for one class by converting the whole life-time of the masses into labor time.” — Karl Marx, Capital Vol. 1 (1867), Ch. 17. [web] 

[10] Sobrina de Alguien, “The Narrative Devices of Criticism: Capital vs. Breaking Bad” (2022). [web] 

[11] Incidentally, in Adam Smith’s Wealth of Nations, “labour” appears 53% more frequently than “capital” (1003 vs. 655). But in Marx’s Capital it happens 180% more frequently (2944 vs. 1050)! 

[12] Karl Marx, Capital Vol. 1 (1867), Ch. 4. [web] 

[13] Karl Marx, Capital Vol. 1 (1867), Ch. 5. [web] 

[14] “The capitalist class, in contrast to the other consumers of surplus value, who do not stand in a direct and active relation to its production, is the productive class par excellence.” — Karl Marx, “Productive and Unproductive Labour” (1861). [web] 

[15] Karl Marx, Capital Vol. 1 (1867), Ch. 18. [web] 

[16] Friedrich Engels, Introduction (1891) to Wage Labour and Capital (1847). [web] 

[17] V. I. Lenin (1900), quoted as part of an exploration of definitions of capitalism in the 21st century, “Communist Self-Confidence” (2023). [web] 

[18] That Western Marxists tend to talk in terms of surplus-value more than labour-power — even beloved ones [web] — is perhaps a lingering remnant of capital-centric thinking over worker-centric thinking.