With this explanation, it was satisfied.And we, too, may, for the present, stop at this point.But, to avoid misconceptions, I will remind the reader that today this explanation has become wholly inadequate.Marx was the first to investigate thoroughly into the value-forming quality of labor and to discover that not all labor which is apparently, or even really, necessary to the production of a commodity, imparts under all circumstances to this commodity a magnitude of value corresponding to the quantity of labor used up.If, therefore, we say today in short, with economists like Ricardo, that the value of a commodity is determined by the labor necessary to its production, we always imply the reservations and restrictions made by Marx.Thus much for our present purpose; further information can be found in Marx's Critique of Political Economy , which appeared in 1859, and in the first volume of Capital.
But, as soon as the economists applied this determination of value by labor to the commodity "labor", they fell from one contradiction into another.
How is the value of "labor" determined? By the necessary labor embodied in it.But how much labor is embodied in the labor of a laborer of a day a week, a month, a year.If labor is the measure of all values, we can express the "value of labor" only in labor.But we know absolutely nothing about the value of an hour's labor, if all that we know about it is that it is equal to one hour's labor.So, thereby, we have not advanced one hair's breadth nearer our goal; we are constantly turning about in a circle.
Classical economics, therefore, essayed another turn.It said: the value of a commodity is equal to its cost of production.But, what is the cost of production of "labor"? In order to answer this question, the economists are forced to strain logic just a little.Instead of investigating the cost of production of labor itself, which, unfortunately, cannot be ascertained, they now investigate the cost of production of the laborer.And this latter can be ascertained.It changes according to time and circumstances, but for a given condition of society, in a given locality, and in a given branch of production, it, too, is given, at least within quite narrow limits.
We live today under the regime of capitalist production, under which a large and steadily growing class of the population can live only on the condition that it works for the owners of the means of production -- tools, machines, raw materials, and means of subsistence -- in return for wages.
On the basis of this mode of production, the laborer's cost of production consists of the sum of the means of subsistence (or their price in money)which on the average are requisite to enable him to work, to maintain in him this capacity for work, and to replace him at his departure, by reason of age, sickness, or death, with another laborer -- that is to say, to propagate the working class in required numbers.
Let us assume that the money price of these means of subsistence averages 3 shillings a day.Our laborer gets, therefore, a daily wage of 3 shillings from his employer.For this, the capitalist lets him work, say, 12 hours a day.Our capitalist, moreover, calculates somewhat in the following fashion:
Let us assume that our laborer (a machinist) has to make a part of a machine which he finishes in one day.The raw material (iron and brass in the necessary prepared form) costs 20 shillings.The consumption of coal by the steam-engine, the wear-and-tear of this engine itself, of the turning-lathe, and of the other tools with which our laborer works, represent, for one day and one laborer, a value of 1 shilling.The wages for one day are, according to our assumption, 3 shillings.This makes a total of 24 shillings for our piece of a machine.
But, the capitalist calculates that, on an average, he will receive for it a price of 27 shillings from his customers, or 3 shillings over and above his outlay.
Whence do they 3 shillings pocketed by the capitalist come? According to the assertion of classical political economy, commodities are in the long run sold at their values, that is, they are sold at prices which correspond to the necessary quantities of labor contained in them.The average price of our part of a machine -- 27 shillings -- would therefore equal its value, i.e., equal the amount of labor embodied in it.But, of these 27 shillings, 21 shillings were values were values already existing before the machinist began to work; 20 shillings were contained in the raw material, 1 shilling in the fuel consumed during the work and in the machines and tools used in the process and reduced in their efficiency to the value of this amount.
There remains 6 shillings, which have been added to the value of the raw material.But, according to the supposition of our economists, themselves, these 6 shillings can arise only from the labor added to the raw material by the laborer.His 12 hours' labor has created, according to this, a new value of 6 shillings.Therefore, the value of his 12 hours' labor would be equivalent to 6 shillings.So we have at last discovered what the "value of labor" is.
"Hold on there!" cries our machinist."Six shillings? But I have received only 3 shillings! My capitalist swears high and day that the value of my 12 hours' labor is no more than 3 shillings, and if I were to demand 6, he'd laugh at me.What kind of a story is that?"If before this we got with our value of labor into a vicious circle, we now surely have driven straight into an insoluble contradiction.We searched for the value of labor, and we found more than we can use.For the laborer, the value of the 12 hours' labor is 3 shillings; for the capitalist, it is 6 shillings, of which he pays the workingman 3 shillings as wages, and pockets the remaining 3 shilling himself.According to this, labor has not one but two values, and, moreover, two very different values!
