Capital

Say a business owner wins a contract from an apartment complex to remodel one of its buildings. He then hires day laborers to retile the floors, paint the walls, and put in new plumbing.

In Marx's view, the day laborers are the only ones who add value to the apartments, because they're providing the actual work that brings about the changes. But the contractor is the one who, dealing directly with the apartment company, arranges the work and keeps a large chunk of the money gained from the work of the day laborers. According to Marx, that chunk—or surplus value—the contractor picks up should rightfully belong to the day laborers.

That surplus value is the source of capital.

Let's zoom in on Marx's definition of capital in the Manifesto. Capital, Marx says, is "that kind of property which exploits wage-labour, and which cannot increase except upon condition of begetting a new supply of wage-labour for fresh exploitation" (Section2.17).

Let's say that a wage-laborer manages to somehow save up some capital, maybe by negotiating higher pay and then pinching lots of pennies. What will the former wage-laborer do with this capital? Usually, start a business, which will allow him or her to hire others so that he or she can appropriate the surplus value of their labor. But this can only be done if there are poorer workers around, and markets that require the products of this new business owner's new business. All this requires a new supply of wage-labor to exploit. There always has to be someone at the bottom.

One last thing: Marx says that property under capitalism "is based on the antagonism of capital and wage-labour" (Section2.17). Well, Karl, how does that happen?

Let's go back to that example of the contractor with the contract at an apartment complex. Once the contractor takes the capital (appropriated surplus value) and uses it to buy himself a new house, the day laborers may be angry or jealous. That's because it's their labor the contractor's using to purchase the house—in fact, he may even use the capital gained from the day laborers to hire them to build his house, instead of the day laborers getting to build houses for themselves.

Under capitalism, the contractor is treated as a hero—the "job provider"—but Marx argues that he is the villain of the story, stealing the value added by the day laborers under the pretense of providing them with work.