Karl Kautsky

The Capitalist Class

Chapter III

Whence does the capitalist class derive its income? The gains of merchants’ and usurers’ capital consisted originally of the portions which the merchants and usurers withheld from the property of those who needed them, either to satisfy a craving for luxuries, or for aid in distress. It is otherwise with industrial capital.

How the Capitalist Class Squeezes Profit out of the Working Class

The capitalist class performs no manner of productive work. This is done by the wage-worker. But the wage-worker does not produce for himself; he cannot. All the things which are to-day indispensable for production – land and capital – are the private property of a comparatively small number of people. The proletarian, the person who has none of these, must either starve or sell the only thing left to him, his labor-power, to the person who will buy it. That person is the capitalist. When the capitalist buys the labor-power of a proletarian, and thereby turns the latter into a wage worker, he does so only because the wage-worker will produce more than he is paid for. If he produced only as much as he is paid for – and worse yet, it he produced less – the capitalist would have no use for him, would not buy his labor-power, would not have him for a wage-worker. The proletarian, the wage worker, employed by the capitalist, is the wealth producer. Out of the heap of wealth brought into life by the wage-worker himself, the capitalist takes a part, not more than one-quarter, it as much, and returns that to the wage-worker in payment for his labor power, as his wages. The rest of the wealth produced by the wage-worker, the remaining three-quarters, if not more, is the surplus – that is to say, the quantity of wealth produced by the worker over and above what was necessary to enable him to restore the forces he expended in production. That surplus the capitalist keeps to himself; he calls it profits; it constitutes his income. Industrial capital, accordingly, hatches its profits by exploiting the propertiless wage-workers.

It so happens, however, that, in proportion as the capitalist system of production develops, the industrial form of capital overshadows all others, and forces them into its service; and it happens, furthermore, that this evolution cannot go on without the capitalists returning to the wage-workers, in some manner or another (by the employment of an increased number of personal service men, such as lackeys, watchers, etc.; by institutions styled “benevolent;” and so forth) a part of the surplus which they withhold from him. As a result of all these causes, the surplus produced by the proletarians becomes ever more the only source from which the whole capitalist class draws its income.

As the small manufacturer and small farmer are disappearing, and their influence upon modern society is felt ever less, so also are disappearing, the old forms of merchants’ and usurers’ capital, both of which made their gains by exploiting the non-capitalist classes. Already there are nations without artisans and small farmers. England is an instance in point. But no one can conceive of a single modern State without large production. Whoever desires to understand the modern forms of capital must proceed from the industrial form that capital has assumed. The real and most prominent or the sources from which all capitalist gains flow is to be found in the surplus which capitalist industry hatches out.

Why the Surplus Taken from the Working Class is Steadily Increasing

The proletariat produces the surplus which industrial capital appropriates. This surplus is on a steady increase through the increased burden of toil thrown upon the workers, through the introduction of labor-saving machines, through the cheapening of labor-power, etc., etc. Side by side with the development of the capitalist system of production grows the number of the exploited proletarians, and, as an inevitable consequence of this, the quantity of the surplus that flows into the hands of the capitalist class becomes ever larger and larger.

Unfortunately, however, “life’s unalloyed enjoyment is not the lot of mortal man.” However hateful the operation may be to him, the capitalist is compelled to “divide.” The landlord and the State or Government both come in for their shares; and the capitalist class is compelled to divide with them the surplus that it scoops in.


Last updated on 25.12.2003