- Marx starts this chapter aiming to answer the question of how capitalists find surplus-value or profit as they go about the M-C-M' pattern described in Chapter 4. They're buying commodities in order to sell at a higher price—but if everyone in the market is exchanging equivalent for equivalent, where do the extra bucks come from?
- He gets right to the answer: the capacity for labor, also known as labor-power, is the commodity that has the special ability to be a source of value. It can be exploited to produce more value than it itself is worth. Forgetting for a moment other considerations such as the cost of the means of production, if labor-power costs $5, but the capitalist is able to squeeze $20 out of the laborer, then the capitalist has made $15 of profit when it buys the labor-power commodity and puts it to work. So in a world where all commodities and money are exchanged as equivalents, the way to come up with additional money in the system is to buy the labor-power commodity and make the laborers work for more than they're worth. Got it?
- A bunch of conditions have to be met before capitalists can find labor-power available for purchase on the market as a commodity. First, the laborer (that's you) has to be the free proprietor of his or her own labor-power. In other words, the laborer has to have the right to sell his or her labor-power for a specific amount of time and then get to go home. If the laborer sold all of his or her time, that would be slavery, not the capitalist system. The labor-power has to be the property of the free laborer to sell.
- Another condition that has to be met for this whole scheme to work is that the laborer must need to sell his or her labor-power, rather than having other commodities lying around to sell. If the laborer had a bunch of other commodities on hand to sell, that would make the laborer an owner of a means of production—a means for making commodities—which goes against the definition of a laborer.
- Marx points out that there's nothing natural about this setup. It's not as if nature created some people who must sell labor-power and other people who can only buy it. The capitalist system is the result of specific historical developments, which he describes in the Communist Manifesto.
- If a society just has money, that doesn't necessarily mean it has capital. Capital only starts when the free worker is available on the market selling labor-power.
- Remember that everything has a value—its socially necessary labor time. What's the value of the labor-power commodity? It's the cost, the socially necessary amount of labor, that goes into keeping a laborer alive and reproducing. Workers have to be fed and clothed and housed and so on. That's what goes into the cost of labor power.
- Sounds like a pretty grim way of looking at life, but that's the way it goes.
- Marx points out that the value of labor-power boils down to the value of the means of subsistence—food and housing, for example. The value of those things changes with advances in technology, impositions of tariffs, etc. Those in turn change the value of labor-power. If new technology makes food cheap, the value of labor-power goes down because it costs less to maintain.
- Marx mentions that workers advance the use-value of their labor-power to capitalists because workers let buyers consume it before they get paid.
- This is all fair and square, Marx says, according to the way capitalist economists look at life: in terms of freedom, equality, property, and people pursuing their own advantage. These economists, whom Marx mocks, think such a setup leads to the greatest benefit for the common interest.
- But Marx says that to find the truth, we need to stop looking at just the market, where labor-power is bought and sold, and look at what takes place outside this sphere of circulation or exchange, namely, at what takes place during production.