Max Shachtman


The Fight For Socialism


The World We Live In

BY establishing the fact of the fundamental division of capitalism into two economic classes, we have gone a great distance, but there is still much ground to cover. Capitalism is kept alive not only by force, but by ideas. These ideas it instills into the masses of the people from the day they start thinking to their last day. The schools, the newspapers, magazines and books, the radio, the moving picture theater, the pulpits, are all the means by which the thoughts of people are shaped. They are used by the class that controls them to argue that the society we live in is fundamentally good and correct. By and large, the working class accepts these ideas. If it did not, capitalism could not exist very long. Because he is stuffed full of these ideas, the worker will usually say at this point:

Granted that I am a worker. Even suppose I am part of a class. Granted, further, that my employer is a capitalist, a member of another class. What is wrong with that? That is normal, isn’t it, and proper?

Why should there be conflicts between these two groups? Or, if there are conflicts, why can’t they be settled amicably, to the satisfaction and benefit of both sides, provided they both take a reasonable position?

“Isn’t it a fact that just as capital needs labor, so labor needs capital? If there were no labor, naturally capital could not produce and make a profit. But if there were no capital, who would employ labor and provide it with an income? Aren’t both sides interested in production, and more production, making possible jobs and wages for the one and a legitimate profit for the other?

“What is more, if he is a smarter or abler man, like a great artist, it is perfectly legitimate for him to rise to the top and become a capitalist. What is to prevent me from getting to the top of the ladder myself if I work hard enough, or if I am left a legacy by someone, or if I have a stroke of good luck?”

Let us consider these last points first, before we deal with the other, more basic, questions. It is perfectly “legitimate” if a man who has genuine talent and applies himself diligently to study and practice, rises to prominence as a violinist, a painter, a writer. If I have no talent and am lazy in the bargain, I cannot rightfully complain if I am not recognized as a prominent artist.

But the great artist who has risen to the heights cannot be compared with the capitalist. The artist entertains us and enriches our lives. He does not employ us, exploit us or oppress us; nor does he have or claim to have the power to do so. He cannot and does not bequeath his prominence to his heirs. The social consequences of his “being at the top” are in no wise the same as in the case of the capitalist.

Secondly, it is clear that the whole working class, which numbers tens of millions, cannot become capitalists, who number only thousands. If ten workers rose, by one means or another, to the ranks of the capitalist class, that would change the social position of ten persons, but would leave the fundamental division of society unchanged. If worker A became a capitalist and capitalist B was forced to become a worker, that would change the social position of two persons, but everything else would remain the same.

Thirdly, we see any number of capitalists who do not lift a finger to do a lick of work of any kind, and yet remain the wealthy and powerful owners of industry and finance. Others do perform a useful task, but their tremendous incomes and powers do not correspond to their labor but rather of their mere ownership of capital. Still others never did work of any kind in all their lives, or haven’t a trace of ability or a functioning brain cell in their heads, yet they are wealthy and powerful and part of the ruling class only because of the accident of birth and the law of inheritance. Finally, we see workers by the million who toil like beavers all their lives, who are ingenious and talented, who try to save every penny they possible can, and yet do not become capitalists.

Or let us take the question of production.

It is perfectly true that both the workers and the capitalists are vitally interested in production. But they are interested in a fundamentally different way.

The worker is interested in production primarily in so far as it is production for use, that is, in so far as it makes it possible for him to have the things needed to preserve and expand life – food, clothing, shelter, comforts.

The capitalist is interested only in production for profit. He will produce poison gas as readily as he produces shoes, and more readily if it yields a greater profit. However, if he cannot realize a profit for himself on the market, he will produce neither poison gas nor shoes. The fact that people always need shoes and food and shelter is of absolutely no concern to him, unless he can realize a profit for himself in producing these articles. If he cannot, he suspends production. He closes down his plant. Thousands and sometimes millions of workers are thrown out of work.

These workers are still interested in production, in jobs, in a regular income. They are compelled to be interested in continuous production, for without it life is extremely wretched if not impossible for them. Their interest in production is not based on whether or not it yields a profit to the capitalist. It is based on their needs, which do not disappear for a minute. The capitalist, on the contrary, will produce only if it is profitable to do so. Capitalism cannot reconcile these two conflicting social interests!

However, the best way of seeing how superficial and wrong are the ideas which capitalism inculcates into the working class, is to go to the roots of the world we live in today, capitalist society. Let us examine it with as little emotion as possible and with a maximum of scientific accuracy. Society is an organism that is subject to analysis as scientific as any employed in analyzing other organisms. Let us see bow this one came into existence, how it operates, what makes its blood circulate, what its diseases are and how they developed, why they threaten it with extinction and why this extinction is inevitable.

Commodity Production

Our analysis of capitalism starts with the two words: commodity production. What do they mean?

A commodity is any object that labor has produced for sale on the market. A stool produced by a man for his own use, and not for sale, is not a commodity. Exactly the same stool, produced out of the same materials and in the same way by the same man, but offered for sale on the market, is a commodity.

The fact that a commodity can be and is sold on the market already shows that it has two values. One is its use value. That is, it is valuable to someone for whom it satisfies a need, real or imaginary. The other is its exchange value. That is, it has a value in terms of money or other commodities for which it can be exchanged. Without these characteristics, a product of labor could never be sold on the market – it would not be a commodity.

Commodity production is many centuries older than capitalism. But in pre-capitalist times, it was simple commodity production. The small peasant producer, the artisan or handicraftsman produced commodities for the market. But he owned his own tools, his own equipment, or his own land, that is, his own means of production. He produced commodities for exchange with another producer for the purpose of satisfying their respective needs. He did not employ hired labor. His object was not primarily the gaining of profit. The accumulation of great wealth and capital was practically out of the question under these circumstances.

For commodity production to become capitalistic, a tremendous change had to take place. It was first necessary to separate the means of production from their former private owners, the small peasant, the artisan; in a word, to expropriate or destroy the private property of the independent producer. The cruelty with which this was accomplished, re suffering and misery it brought to millions, make some of the foulest pages in human history. It is ironical to note that the great beneficiaries of modern capitalism, who grow hysterical at the very mention of the word “expropriation,” came to their present power and wealth on the basis of the most widespread expropriations known up to that time.

The vast expropriations and ruin of the independent producer were greatly stimulated by the Industrial Revolution, the advent of steam power, the development of modern machines, which meant the displacement of manufacture (making by hand) by machinofacture (making by machine).

Modern production is not based upon the spinning wheel, the cobbler’s bench, the tailor’s needle, and the peasant’s plow. Its foundations are big, complicated, expensive but infinitely more efficient machines and workshops. To go into the business of shoemaking, it is no longer sufficient to get a bench, an awl, some nails and thread, and a few hides. Nowadays, it requires tremendous investments of capital, not only for raw materials and labor but for machinery which is entirely in the hands of a powerful monopoly. In the old days, a newly-established small foundry could easily enter into fair competition with another. Nowadays, iron and steel are produced in mills of vast dimensions, whose control is centralized in the hands of a tiny group of monopolistic capitalists. The idea of a “little man” competing with these mills by setting up a foundry with a few hundred or even a few thousand dollars he has managed to save, is the wildest kind of fantasy.

The tremendous change that has made simple commodity production capitalistic, consists in separating the big mass of independent producers from the means of production and converting these means into the private property of a small minority of monopolists. Production is no longer carried on to satisfy mutual needs, but only for private profit, for the accumulation of capital.

The ruin of the big mass of independent producers resulted in the creation of a large class of propertyless laborers, the modern wage worker. The laborer of today is radically different from the laborer in the social systems that came before capitalism. He is not owned like the ancient chattel slave, like a thing, like a piece of private property that can be bought and sold. He is not a serf bound to the soil, without any rights whatsoever, and duty-bound to work not only for himself but also for some feudal lord. He is a free worker. In what sense? He hires himself out on the market to an employer. He offers for sale only his power or ability to work, in return for which he receives a wage. He is “free” to work at a job, or not to work. That is, he is free to work – or starve!

There is another, and a very important, sense in which he is “free.” His ancestors owned their tools, equipment or land, which made it possible for them to be independent producers. Under capitalism, the worker has been “freed” from his tools and equipment. He no longer owns, and he cannot own, the means of production. He is a propertyless worker. He does not and cannot own the big machines, the mills and workshops, the vast stocks of raw materials, with which modern production is carried on. He must work on the land, in the plant, with the machines and raw materials owned by others.

Let us, then, summarize the distinguishing marks of capitalism:

At this point, we must add to our understanding by looking into the matter of labor power, that is, the mental and physical ability to work.

Labor Power – the Peculiar Commodity

The worker is not a commodity, but his labor power is. He produces and reproduces his ability to work so that it can be sold on the market. He offers it to the highest bidder in exchange for wages, just as any other commodity is exchanged on the market. But labor power is a unique commodity. It differs in one basic respect from all other commodities. If this difference is not clearly and fully understood, nothing will be understood. Let us therefore examine it with the closest attention.

Every commodity has a value, and must have a value to be a commodity. This is its use value. It can be used as an article to be consumed, like a pair of shoes, or as a means of producing other articles, like a machine for making shoes. But capitalism is not in the least interested in producing articles merely because they are useful, or have a use value. That is not the way it is organized or the purpose for which it functions.

Let us bear in mind that capitalism is based on commodity production, that is, production for the market. For capitalism, or a capitalist, to provide an article, it must therefore have exchange value. That is nothing but the quality of an article, of a product, that makes it possible to exchange it on the market for other commodities, usually through the medium of money. Every commodity has not only a use value but also an exchange value.

The question now is: how is the exchange value of commodities determined? A suit of clothes has a higher exchange value than a pair of shoes; and an engine lathe has an even higher value. To say that one costs more than the other, does not answer the question, for it is only another way of saying the same thing. In measuring the exchange value of commodities, we must first find out what they all have in common and then establish the greater or lesser amount of it that each commodity possesses.

It should be obvious that the measuring rod is not the use value of a commodity. We can hardly say that an engine lathe has fifty times the value of a pair of shoes because it is fifty times more useful, or that a machine gun has the value of ten radios because it is ten times as useful. It is impossible to compare commodities on the basis of their use values, because each of them is so different in quality. All of them must, instead, be compared with something else, with something they have in common, but in different quantities. And what all of them have in common is human labor. That is, human labor has been expended to produce them.

The value – exchange value – of a commodity is determined and measured by the quantity of labor needed to produce it.

Let us expand on this for a moment in order to be as exact as possible. What is meant by the “quantity of labor needed to produce” a commodity? Does it mean that a pair of shoes that a slow worker takes ten hours to produce on a cobbler’s bench is worth ten times as much as a pair of shoes that a fast worker takes only one hour to produce on a modern, highly efficient machine? Obviously not. Assuming approximately the same quality in the two pairs, they will have approximately the same value on the market, the same exchange value.

Exchange values are always being changed. They change in accordance with the rising productivity of labor, the increase in skill of the worker, the improvement of machinery and efficiency of operation, the invention of new machinery. The labor needed to produce a commodity thus changes in quantity. Exchange value is determined not by the slower worker with the old-fashioned methods or machines, but by the faster worker operating the newest machines by the latest methods developed in society. Which is another way of saying that the value of a commodity is determined by the quantity of socially-necessary labor needed for its production.

Labor is the source of all exchange value. This is a basic truth that capitalism and all its defenders move heaven and earth to prevent workers from learning.

What about the value of labor power, which we have also called a commodity? The same holds true for the commodity, but, as we have said, with one extremely important difference.

The worker sells his labor power to the employer. This he must do, because, as we know, it is the employer who owns the plant, the machines, the raw materials as his private property, whereas the worker possesses only his ability to work. In return for the work he does for the employer, the latter gives him wages.

Now the question is: are the wages received by the worker equal to the value of the commodity he has sold the employer, namely, his labor power? Here we come to the heart of the whole problem of capitalism and capitalist social relations.

If labor power is a commodity, then, like all commodities, its value, too, is determined by the quantity of socially-necessary time needed to produce it. What produces labor power? Food, clothing, and shelter which a worker requires to maintain himself in a condition enabling him to continue working, and to maintain a family in which new generations of workers can be raised. The worker sells his labor power to the employer, and in exchange he receives money needed for food, clothing and shelter.

So far, everything seems to be proper and perfectly fair. The worker gives something and gets something; so does the capitalist. The capitalist says, “Give me a fair day’s work and I will give you a fair day’s pay.” The worker says, “For a fair day’s pay, you will get a fair day’s work.” It would seem that there has been a fair-and-square exchange between the two parties. But let us look a little further.

If the employer has given the worker as much as the worker has given him, why did the employer need the worker in the first place? He had just as much before he hired the worker as he did at the end of the first working day – assuming he gave the worker, in the form of wages, the same value as the worker contributed to him, in the form of applied labor power. He may not, it is true, have lost anything by the transaction, but neither did he gain anything. This would make no sense, however.

Let us put it another way. Before he hired the worker, he had (to take an example for illustration) $100 invested in raw materials. He had another $10 to give the worker in wages for, let us say, ten hours of work. The worker applies his ability to work (his labor power) to the raw materials. He thereby increases its value from the originally invested $100 to the sum of $110, which can now be realized by selling the finished product on the market.

What good has the worker’s labor been to his employer? The employer had $110 to begin with ($100 for raw materials and $10 for wages) and he can now sell his finished product only for the same $110. The employer has not advanced an inch; he is right back to where he started. The only one who seems to be ahead is the worker. He started without a penny, and at the end of the day he is tired out but he has $10 he never had before. It would then appear that the employer had only two reasons for opening up a plant for production: one, to produce articles which are of use to people so that they can buy them on the market; and the other, to provide the worker with the money needed to buy these articles. As for himself, he got absolutely nothing out of the whole affair, except the warm and pious feeling that he was benefiting humanity.

But this makes no sense, either. The capitalist produces only if a profit can be made. When there is no profit, he does not keep his plant working but closes it down or disposes of it to someone else.

The key to the mystery lies in this: Labor power is a peculiar commodity. It differs from all others in the fact that it alone is capable of creating greater value than the value which itself possesses! What is meant by this?

The Basis of Exploitation, Profit and the Class Struggle

The exchange value of the commodity known as labor power is received by the worker in the form of wages. With his wages, the worker buys other commodities which enable him to maintain and renew his ability to work. But while it takes him only a part of the working day to produce the value represented by his wages, the capitalist has the use of his labor for the whole of the working day!

By his work, the worker adds to the value of the materials, be they cotton to be made into a shirt, leather to be made into shoes, metal to be made into automobiles. A shirt is worth more on the market than the cotton originally used to make it. In transforming the cotton into a shirt, the worker has added to its value. But if the worker is to be paid in wages to the amount of the value he has added to the cotton, the employer, as in the illustration above, has not advanced an inch. He does advance if the worker adds a greater value than he receives in the form of wages. That is exactly what happens.

During the first three or four or five hours of the working day, the worker adds enough value to equal the wages he receives. But he contracted to work a full day. He continues to create value during the balance of the day. This additional value is known as surplus-value. It goes, not to the worker who created it, but to the capitalist who hired the worker for the full day (or week, or month, as the case may be), and who pockets this surplus-value in the form of profit. It is only because the worker can create this surplus, and only because the employer can pocket it, that labor is hired and capitalism can produce. That is the secret, and there is no other.

That is the basis for the exploitation of the working class by the capitalist class. The ownership of the means of production as the private property of capitalists makes it possible for them to exploit the workers, to squeeze out of them surplus-value and thereby profits.

Once this is understood, the rest follows easily. The capitalists give every explanation possible for their profits, except the real one. They talk about the “risks of capital,” about the “legitimate yield of enterprise,” about their own “hard work,” and a thousand other things. But if they were a million times more enterprising than they are, and took a million more risks than they do, and if they cheated each other and everyone else a million times as much as they do – there would still be no other way of making profit under capitalism than by exploiting labor, by forcing labor to create a surplus-value above that which is represented by wages. And the means they employ to reduce labor to the position of a wage-slave rests in the private ownership of the means of production and exchange.

That is why capitalists always seek to reduce wages. The lower the wages paid, the higher the profits made. That is why they seek to lengthen the working day. The longer the working day, the more hours the worker devotes to producing surplus-value. That is why they always seek to speed up the worker, to intensify his production, to have one worker operate more and more machines and do the work of more and more workers. The more intensely the worker labors, the more value he creates; therefore, the more surplus-value; therefore, the more profit.

The greed for profits knows no limit. If capital makes five per cent profit, it is not content until it makes ten; when it makes ten, it seeks every possible way of making twenty. Profits can be obtained and increased only by a constant intensification of the exploitation of labor, by reducing labor’s share of the national income, by lowering labor’s standard of living.

Consciously or unconsciously, in an organized manner or as individuals, labor seeks to resist this exploitation and its intensification. It seeks to maintain its standard of living and even to raise it. It seeks higher wages and a shorter working-day. It comes into constant conflict with the compelling, irrepressible drive of capitalist production, which is the drive for profit, for the accumulation of more and more capital and the production of more and more profit.

This conflict is not so much a conflict between the individual worker and the individual capitalist, but between the working class and the capitalist class. It is the modern class struggle. Nobody has artificially manufactured it; nobody has invented it. It is the direct, natural, inevitable product of capitalist society.

There are other conflicts in capitalist society, to be sure. There are conflicts inside the working class, as has been noted before. There are also conflicts – violent ones – inside the capitalist class. Each capitalist seeks to dominate others. Each seeks to control, absorb, expropriate the other for his own benefit. Such conflicts rage within the capitalist class of each nation, and between capitalist nations themselves. But the capitalists are united as a class for the maintenance of their own social system and the defense of their class interests. They can and will differ on a thousand subjects, but they are united in defense of the system of capitalist private property upon which rests their power and rule.

The class struggle between capital and labor is therefore basic to modern society. It is a struggle that goes on all the time, now hidden and now open, now muted and now violent. It is not only unceasing, but also irreconcilable. The basic class interests cannot be harmonized. One or the other must triumph.

Let us see why this is so. Let us see why it is absurd and futile to oppose the idea of the class struggle. Let us see why it is necessary for the working class to understand that the struggle exists, that it cannot be patched up by compromises in which both sides “give in a little” and act “reasonably,” but that, on the contrary, it is a struggle that must be carried through to the end and in a conscious manner.

Max Shachtman

Marxist Writers’

Last updated on 23.4.2005