Chapter 2

We Marxians are often accused of neglecting the intellectual factor and, as Deville says, a whole syndicate of factors; but we do not neglect them. We recognize their existence and their importance, but we do refuse to waste our revolutionary energy on derivative phenomena when we are able to see and recognize the decisive, dominant factor, the economic factor. As Deville says, we do not neglect the cart because we insist upon putting it behind the horse instead of in front of or alongside of him, as our critics would have us do. Now, if the economic factor is the basic factor, it behooves us to understand the present economic system--Marx's Law of Surplus-Value is the key to this system.

FOOTNOTE:

[2] If this be true the question naturally arises: Why do the socialists, instead of using economic methods to solve an economic question, organize themselves into a political party? To answer this question, we must first see what the State is and what relation it holds to the economic conditions. Gabriel Deville defines the State thus: "The State is the public power of coercion created and maintained in human societies by their division into classes, a power which, being clothed with force, makes laws and levies taxes." As long as the economically dominant class retain full possession of this public power of coercion they are able to use it as a weapon to defeat every attempt to alter the economic structure of society. Hence every attempt to destroy economic privilege and establish Industrial Democracy inevitably takes the form of a political class struggle between the economically privileged class and the economically exploited class.

II

THE LAW OF SURPLUS-VALUE

The second great idea that we associate with the name of Karl Marx is the Law of Surplus-Value. Curiously enough this one technical theory is the only discovery that bourgeois writers and economists give Marx credit for. If you look up Marx in any ordinary encyclopedia or reference book you will find they make his fame depend on this theory alone, and to make matters worse they usually misstate and misrepresent this theory, while they invariably fail to mention his two other equally great, if not greater discoveries, the Materialistic Conception of History and the Class Struggle. I think the reason they give special prominence to this law of Surplus-Value is that, as it is a purely technical theory in economics, it is easier to obscure it with a cloud of sophistry and persuade their willing dupes that they have refuted it. And then they raise the cry that the foundation of Marxian Socialism has been destroyed and that the whole structure is about to tumble down on the heads of its crazy defenders, the Socialists. It is much to be regretted that many so-called Socialists are found foolish enough to play into the hands of the Capitalists by joining in the silly cry that some pigmy in political economy has overthrown the Marxian theory of Value. I suppose these so-called Socialists are actuated by a mad desire to be up to date, to keep up with the intellectual band-wagon. Revolutions in the various sciences have been going on so rapidly, they fancy that a theory that was formulated forty years ago must be a back-number, and so they hasten to declare their allegiance to the last new cloud of sophistry, purporting to be a theory of value, that has been evolved by the feeble minds of the anarchists of Italy or the capitalist economists of Austria. The Fabians of London are the most striking example of these socialists whose heads have been turned in this way by the rapid progress of science. But the followers of Bernstein in Europe and this country are running into the same danger and in their eagerness to grasp the very newest and latest doctrine will fall easy victims of the first windy and pretentious fakir who comes along. Ask any one of these fellows who tells you that the Marxian theory of Value has been exploded, to state the new and correct theory of Value that has taken its place and you will find that he cannot state a theory that you or I or any other man can understand. He will either admit he is floored, or else he will emit a dense fog of words. I challenge any one of them to state a theory of value that he himself can understand, let alone make any one else understand.

Now the Marxian theory of Value can be clearly stated so that you and I can understand it. But let us begin with surplus-value. This theory of surplus-value is simply the scientific formulation of the fact that workingmen had been conscious of in a vague way long before Karl Marx's day, the fact that the workingman don't get a fair deal, that he don't get all he earns. This fact had been formulated as long ago as 1821 by the unknown author of a letter to Lord John Russell on "The Source and Remedy of the National Difficulties." In this letter the very phrases "surplus produce" and "surplus labor" are used. You will find that Marx refers to this letter in a note on page 369 (Humboldt edition, 644 Kerr edition) of the American edition of Capital. The Russian writer, Slepzoff, quotes several passages from this letter in an article in the December, 1899, number of _La Revue Socialiste_, and it is amazing to see how near to Marx's conclusions this unknown writer had come eighty years ago, but the conditions were not ripe and his letter would to-day be forgotten if Marx had not embalmed it in a footnote. I confess I was surprised to learn that this was not a purely original discovery of Marx's, but the fact that it is not is one more signal confirmation of the theory I have given in this lecture of the double or multiple discovery of great ideas.

But let us resume the discussion of Surplus Value and see just what it really is.

No matter where you, my workingman hearer or reader may work, the person or corporation or trust for whom or which you work gets back more out of your labor, than he or it pays you in wages. If this is not so, your employer is either running a charitable institution or he is in business for his health. You may have employers of that kind here on the East Side of New York, but I have never met any of them elsewhere. It is impossible to conceive of a man going on day after day, week after week, year after year, paying you wages, unless he receives more for the product of your labor than he pays you in wages. Now, this difference between what you get and what he gets is what we call surplus-value.

This surplus-value is the key to the whole present economic organization of society. The end and object of bourgeois society is the formation and accumulation of surplus-value, or in other words, the systematic robbery of the producing class. Now when we say robbery, we do not mean to accuse employers of conscious dishonesty. They are the creatures of a system just as the workers are, but it is a system which makes their interests diametrically opposed to the interests of their employees. The only way the capitalists can increase their relative share of the product of their employees' labor is by decreasing the relative share of the latter.

Now, if out of the total product of his labor the workingman only receives a part, then it is true to say that he works part of the day for himself and part of the day gratuitously for the capitalist. Let us say, for purposes of illustration, that he works three hours for himself and seven hours for his employer for nothing. This three hours we call his necessary labor time, or his paid labor; and the seven hours we call his surplus labor time or his unpaid labor. The product of his three hours' labor is the equivalent of his wages or as we call it, the value of his Labor-Power. The product of the other seven hours of his labor, his surplus or unpaid labor, is surplus product or surplus-value. Starting from the fact that every workingman knows to be true, that he don't get all he feels he ought to get, we have thus, I think, made the definition of surplus-value clear to every one of you, but we have been talking of surplus-value and value of labor power and we have not yet defined Value.

When we speak of the value of an object we mean the amount of human labor that is embodied or accumulated in it, that has been spent in fitting it to satisfy human needs. And we measure the amount of this human labor by its duration, by labor-time. You, if you are a skilled, highly-paid worker, receiving say four dollars a day, may say that it is absurd to say that an hour of your labor produces no more value than an hour of Tom's or Dick's or Pete's, who get only eighty cents a day apiece. You are quite right. Your hour does produce more value. The labor-time that determines value is the labor-time of the average, untrained worker. Again, you may waste your time, spending half of it looking out of the window or carrying on a flirtation. This wasted labor does not count in measuring value. The only labor that counts is the labor that is socially necessary under normal conditions for the production of the given commodity. Again, labor spent to produce a useless article does not produce value. To produce value the labor must serve to satisfy human wants. Now, I think this is quite clear so far. We know what surplus-value is. We know what value is and how it is measured. Let us now see what is meant by the Value of Labor-Power.

To begin with, what is Labor-Power? When a workingman goes upon the market to sell something for money with which to buy bread and butter and other necessaries of life, what has he to offer for sale? He cannot offer a finished commodity, such as a watch, a shoe, or a book, because he owns nothing. He has neither the necessary machinery, the necessary raw material, nor even the necessary place in which to work to make these things. These all belong to another class who by owning them, in fact, own him. He cannot offer labor for sale, because his labor does not yet exist. He cannot sell a thing that has no existence. When his labor comes into real objective existence, it is incorporated with materials that are the property of the class that rules him, and no longer belongs to him. He cannot sell what he don't possess. There is only one thing he can sell, namely, his mental and physical or muscular power to do things, to make things. He can sell this for a definite time to an employer, just exactly as a livery stable keeper sells a horse's power to trot to his customers for so much per hour. Now this power of his to do things is what we call his labor-power; that is, his capacity to perform work. Now, its value is determined precisely like the value of every other commodity, _i. e._, by the labor-time socially necessary for its production. Now the labor-time socially necessary for the production of labor-power is the labor-time socially necessary to produce the food, clothing and shelter or lodging that are necessary to enable the laborer to come on the labor market day after day able physically to work, and also to enable him to beget and raise children who will take his place as wage-slaves when he shall have been buried by the County or some Sick and Death Benefit Fund.

In the example we used above we assumed that the laborer worked three hours a day to produce a value equal to the value of his labor-power. The price of this value, the value produced by his paid labor, we call "Wages." This price is often reduced by the competition of "scabs" and other victims of capitalist exploitation, below the real value of labor-power, but we have not time to go into that here, so we will assume that the laborer gets in wages the full value of his labor-power.

Well, then, if he produces in three or four hours a value equal to the value of his labor-power or wages, why doesn't he stop work then, and take his coat and hat and go home and devote the rest of the day to study, reading, games, recreation and amusement? He don't because he can't. He has to agree (voluntarily, of course) to any conditions that the class who by owning his tools own him choose to impose upon him, and the lash of the competition of the unemployed, Capital's Reserve Army, as Marx called it, is ever ready to fall upon his naked back.

Why is he so helpless? Because he and his class have been robbed of the land and the tools and all the means of sustenance and production, and have nothing left them but that empty bauble, legal liberty, liberty to accept wages so small that they barely enable them to live like beasts, or liberty to starve to death and be buried in unmarked graves by the public authorities.

The wage system necessarily implies this surplus labor or unpaid labor. So long as there are wages, workingmen, you will never get the full product of your labor. Let no reformer beguile you into a struggle which simply aims to secure a modification of the wage system! Nothing short of the annihilation of the wage system will give you justice and give you the full product of your labor.

But while wages necessarily imply surplus-labor, the reverse is not true. You can have surplus-labor without wages. Surplus-labor is not an invention of modern capitalists. Since Mankind emerged from the state of Primitive Communism typified by the Garden of Eden in the Hebraic myth, there have been three great systems of economic organization: 1. Slavery; 2. Serfdom; 3. The Wage System. It is interesting to note the varying appearances of surplus or unpaid labor under these three systems.

Under the first, Slavery, all labor appears as unpaid labor. This is only a false appearance, however. During a part of the day the slave only reproduces the value of his maintenance or "keep." During that part of the day he works for himself just as truly as the modern wage slave works for himself during a part of his day. But the property relation conceals the paid labor.

Under the second system, Serfdom, or the Feudal System,--the paid labor and the unpaid labor are absolutely separate and distinct, so that not even the most gifted orthodox political economist can confuse them.

Under the third system, Wage Slavery, the unpaid labor apparently falls to Zero. There is none. You voluntarily enter into a bargain, agreeing that your day's work is worth so much, and you receive the full price agreed upon. But again this is only a false appearance. As we saw by our analysis, a part of the wage-slave's day is devoted to paid labor and a part to unpaid. Here wages or the money relation conceals the unpaid labor and disguises under the mask of a voluntary bargain the struggle of the working class to diminish or abolish unpaid labor, and the class-conscious, pitiless struggle of the capitalist class to increase the unpaid labor and reduce the paid labor to the minimum, _i. e._, to or below the level of bare subsistence. In other words the Wage System conceals the Class Struggle.

III

THE CLASS STRUGGLE

The third of the great ideas that will always be associated with the name of Karl Marx is that of the Class Struggle. The Class Struggle is logically such a necessary consequence of both the Materialistic Conception of History and the Law of Surplus-Value, that as we have discussed them at some length, but little need be said of the Class Struggle itself. In discussing the Materialistic Conception of History we showed with sufficient fullness and clearness that, in the language of the Communist Manifesto, "The history of all hitherto existing society is the history of Class Struggles." Hence it is clear the doctrine of class struggles is a key to past history. But it is more than this. It is a compass by which to steer in the present struggle for the emancipation of the proletariat, who cannot, fortunately, emancipate themselves without emancipating and ennobling all mankind.

The Law of Surplus-Value has shown us that there is a deep-seated, ineradicable conflict between the direct class interest of the proletariat which coincides with the true interests of the human race, and the direct, conscious guiding interest of the class who own the means of production and distribution. There is here a direct clash between two hostile interests. This fact has been skilfully hidden from the eyes of the workers in the past, but the modern socialist movement, aided by the growing brutality of the capitalist class, is making it impossible to fool them in this way much longer. In other words, the workingmen are becoming Class-Conscious, _i. e._, conscious of the fact that they, as a class, have interests which are in direct conflict with the selfish interests of the capitalist class. With the growth of this class-consciousness this conflict of interests must inevitably become a political class struggle. The capitalists, the economically privileged class, struggle to retain possession of the State that they may continue to use it as a weapon to keep the working class subjugated, servile and dependent. The proletariat, the working-class, struggle to obtain possession of the State, that they may use it to destroy every vestige of economic privilege, to abolish private property in the means of production and distribution, and thus put an end to the division of society into classes, and usher in the society of the future, the Co-operative Commonwealth. As the State is in its very nature a class instrument, as its existence is dependent upon the existence of distinct classes, the State in the hands of the victorious proletariat will commit suicide, by tearing down its own foundation.

Until a man perceives and is keenly conscious of this class conflict, a conflict which admits of no truce or compromise, and ranges himself on the side of the workers to remain there until the battle is fought and the victory won, until the proletariat shall have conquered the public powers, taken possession of that class instrument, the State (for so long as the State exists it will be a class instrument) and made it in the hands of the working class a tool to abolish private ownership in the tools and the land, in the means of production and distribution, and to abolish all classes by absorbing them all in the Brotherhood of Man; until a man has thus shown himself clearly conscious of the Class Struggle, with its necessary implications, his heart may be in the right place, but laboring men can not trust him as a leader. The fact that the hearts of many popular reformers, political candidates and so-called "friends of labor," who ignore the class struggle, are on the right side, but gives them added power to mislead and betray workingmen. Workingmen, I beg you to follow no leader who has not a clear enough head to see that there is a class struggle, and a large enough heart to place himself on your side of that struggle. But remember that you are not fighting the battle of a class alone. You are fighting for the future welfare of the whole human race. But while this is true, it is also true that your class must bear the brunt of this battle, for yours is the only class that, in the language of the Manifesto, "has nothing but its chains to lose, and a World to gain!" The rich have much to lose, and this very real and tangible risk of loss not unnaturally blinds the eyes of most of them to the more remote, though infinitely greater compensations that Socialism has to offer them. The Middle Class, even down to those who are just a round above the proletarians on the social ladder, love to ape the very rich and the capitalist magnates. It tickles their silly vanity to fancy that their interests are capitalistic interests, and their mental horizon is too hopelessly limited for them to perceive that the proletariat whom it pleases them to despise as the great army of the "unwashed" are in truth fighting their battles for them, and receiving instead of gratitude, contempt, gibes and sneers. Socialism does occasionally receive a recruit from the very highest stratum of society, but I tell you it is easier for a camel to pass through the eye of a needle than it is for a member of the Middle Class to become a scientific socialist.

I have said the Class Struggle is a compass to steer by in the present struggle for the emancipation of the working class. If we steer by this compass, we will resolutely reject all overtures from political parties representing the interests of other classes, even when such parties in their platform endorse some of the immediate demands of the socialists; we will "fear the Greeks bringing gifts;" we will not be seduced for a moment by the idea of fusion with any so-called Socialist party which is not avowedly based on the Class Struggle; especially as individuals will we avoid giving our votes or our support to any Middle Class party which we may at times fancy to be "moving in the right direction." The history of the class conflicts of the past shows that whenever the proletarians have joined forces with the Middle Class or any section of it, the proletarians have had to bear the heat and burden of the day and when the victory has been won their allies have robbed them of its fruits.

You, yourselves, then, Workingmen, must fight this battle! To win, it is true, you will need the help of members of the other classes. But this help the economic evolution is constantly bringing you. It is a law of the economic evolution that with the progress of industrialism the ratio of the returns of capital to the capital invested constantly diminishes, (though the aggregate volume of those returns increases). You see this in the constant lowering of the rate of interest. Now, as their incomes decrease, the small capitalists and the middle class, who form the vast majority of the possessing class, become unable to continue to support the members of the liberal professions, the priests, preachers, lawyers, editors, lecturers, etc., whose chief function heretofore has been to fool the working class into supporting or at least submitting to the present system. Now, when the income of these unproductive laborers, an income drawn from the class hostile to the proletariat, shall sensibly decrease or, worse still, cease, these educated members of the liberal professions will desert the army of Capital and bring a much-needed reinforcement to the Army of Labor.

Some of the more far-seeing upholders of the present system are keenly conscious of this danger. And this danger (even though most of the expansionists may not realize it), is one of the most potent causes of the Imperialism, Militarism, and Jingoism which are at present disgracing the civilized world. England in Africa, and America in the Philippines are pursuing their present criminal policies, not solely to open new markets for English and American goods, but also to secure new fields for the investment of English and American capital, and thus to stop the continuous dropping of the rate of interest and profits, for if this cannot be stopped, the intellectual proletariat will join the sweating proletariat, and the Co-operative Commonwealth will be established and then the poor capitalists will have to work for their livings like other people.

This was clearly pointed out by a capitalist writer in an essay in a recent number of the Atlantic Monthly, who warned the capitalist opponents of McKinley, Destiny & Co.'s policy of expansion that they were attempting to close the only safety-valve which under present conditions could, not avert, but postpone the Social Revolution.[3]

But, friends, nothing can postpone it long, for the industrial crises and financial panics are recurring at shorter and shorter intervals, and the process of recovery from them is slower and slower, and every panic and crisis forces thousands of educated, intelligent members of the middle class off their narrow and precarious foothold down into the ranks of the proletariat, where the hard logic of the facts will convert them to class-conscious Socialism.