From International Socialist Review, Vol.20 No.4, Fall 1959, pp.120-122.
Transcribed &marked up by Einde O’Callaghan for the Encyclopaedia of Trotskyism On-Line (ETOL).
MARX AND AMERICA: A Study of the Doctrine of Impoverishment
by Earl Browder
Duel, Sloan and Pearce, New York. 1958. 146 pp. $3.
This work evidently impressed the university audience to whom it was first presented in lecture form as well as publishers on both sides of the Atlantic. The thesis of the book – Marxism has been refuted by the unique development of American capitalism – is hardly a novelty. Nor does Browder bring to light any fresh evidence or arguments in support of it. Apparently what this book proposes to add to the great mass of anti-Marxist literature is the author’s reputation.
Browder was Secretary of the Communist Party of the US from 1930 to 1945. He was therefore at the head of the party during the period of the wartime alliance of the US and the Soviet Union when CP policy veered to the extreme right. After the war he became the scapegoat for this policy which was dubbed “Browderism” although it was imposed by the Kremlin on every Communist party in the world. Cut off from the Stalinist apparatus Browder, like so many before him and since, failed to retrace his steps to Marxism. Instead he took the road from Stalinism to Social Democracy. In this sense claims of cold-war propagandists that America’s former Number One Marxist has himself disclosed Marx’s errors have no validity. Browder, as Secretary of the Communist Party, was no more a Marxist than he is today.
Browder’s book, however, is worth some detailed examination because it offers Marxists an opportunity to deal with some of the characteristic arguments of the anti-Marxist crusaders. Despite his claim to “fifty years of study” Browder obviously never understood the methodology of Marx’s political economy. He assumes that because Marx took England as his main source of data, as capitalism developed in other countries it would follow a “pre-determined pattern.” Marx’s pregnant sentence, which he quotes, “The country that is more developed industrially only shows to the less developed, the image of its future,” has been fully confirmed in the sense in which Marx intended it. Basic uniformities in economic and social structures are bound to arise as industrialization develops. But Marx protested strongly in his own time against those who tried to change his sketch of the “origin of capitalism in Western Europe into an historical-philosophical theory of Universal Progress, fatally imposed on all peoples, regardless of historical circumstances in which they find themselves” and warned against the belief in an “open sesame of an historico-philosophical theory of which the supreme virtue consists in its being supra-historical [i.e. beyond the pale of history].” 
Again, Marx speaks of the “specific economic form in which unpaid surplus labor is pumped out of the direct producers (which) determines the relation of rulers and ruled” and forms the economic base “showing infinite variations and gradations in its appearance,” even though its principal conditions are everywhere the same. “This is due,” Marx points out, “to innumerable outside historical influences and so forth, all of which must be ascertained by careful analysis” (my emphasis – TK) 
All this could hardly be clearer. There is not even any need to paraphrase Marx’s words: they so obviously mean what they say. When the question arose of applicability of his analysis to Russia, Marx did not say to his Russian disciples: here’s the blueprint, it will all happen just so in Russia as in England.
He learned the Russian language and steeped himself in economic and historical literature so that he might form an impression of the peculiarities of Russian development. He undoubtedly would have set about a study of America in just such a way.
Browder does not argue that all the laws of capitalism have been inoperative in the USA. He just makes the assumption. Or rather he does try to prove that Marx was wrong about wages and about impoverishment. He also throws in a critique of Lenin’s theory of imperialism for good measure. At present we shall only be concerned with the question of wages and, to a lesser extent with the theory of impoverishment.
Browder takes the wage theory put forward by Marx in Wage-Labor and Capital, composed in 1847, and compares it with that of Value, Price and Profit which dates from 1865. Both of these works were designed for audiences of working men; they were simplified expositions, not scientific treatises. It would certainly be a mistake to look for Marx’s fullest and deepest thinking in either of them on that account. Moreover the first was prepared at a very early stage in Marx’s investigation of capitalist economy. Neither was published during his lifetime. Lucid and valuable as they are for the student, they need to be used with a certain reserve and related to Marx’s fuller treatment in Capital.
The result of Browder’s comparison is that he finds that whereas in 1847 Marx adhered to a “subsistence” theory of wages, in 1865 he made a decisive break with it and accepted that wages were a variable quantity, containing, as Browder puts it, “a social increment above subsistence.” In America the subsistence element has become a quite minor part of the total wage compared with the “social wage” (Browder’s term). This has meant, too, that the idea attributed to Marx that the workers were going to become poorer and poorer under capitalism has been proved ridiculous. Marx consequently becomes an eccentric old gentleman, comparable with Newton, but responsible only for ideas which have provoked others to find out the real truth about capitalism.
That Marx’s thought should have evolved between 1847 and 1865 can surprise only Browder. That he can have been unconscious of the changes he was making, if he did make any, seems farfetched; so does Browder’s claim to have made the discovery that Marx had two, irreconcilable wage theories.
In the first place, Wage-Labor and Capital shows that Marx already was aware that wages could move upward as capitalism developed. He wrote:
“If capital grows, the mass of wage labor grows, the number of wage workers grows; in a word, the domination of capital extends over a greater number of individuals. And if we assume the most favorable case: if productive capital grows, the demand for labor grows. Consequently the price of labor, wages, goes up.” 
Marx makes it clear that wages will be determined by supply and demand and the “price of the necessary means of subsistence,” which would be the axis around which the average wage level for “simple labor power” would turn. While some workers might fall below this level, where the demand for labor power was high, wages would rise above it, and they would be higher for labor which was trained and skilled. The “necessary means of subsistence” will have to be adequate to keep the worker an efficient source of labor power, and will vary with the skill and effort, physical or nervous, which he furnishes – unless the labor market is overstocked.
Already in Wage-Labor and Capital Marx speaks of “our needs and enjoyments” as having a “social nature” and therefore changing with time and place. This is surely the “historical and social element” which was later made more explicit and figures in all Marx’s subsequent discussions of wages.
In the first volume of Capital it is stated that “The value of labor-power is determined by the value of the necessities of life habitually required by the average laborer. The quantity of these necessaries is known at any given epoch of a given society, and can therefore be treated as a constant magnitude” – that is for the succeeding analysis.  Here, too, the assumption is made that “the price of labor-power rises occasionally above its value, but never sinks below it,” not, as Browder states, “that the wages of labor are constantly at their lowest level.” 
In fact Capital improves considerably upon the discussion in Value, Price and Profit. For example, Browder makes a point of emphasizing that Marx there stated that “although we can fix the minimum of wages, we cannot fix their maximum.” If that means that the upper limit cannot be deduced by analysis in terms of money units, that there is a range of indeterminacy, so well and good. But Capital sets limits to this maximum in the statement that “the rise of wages ...is confined within limits that not only leave intact the foundations of the capitalistic system, but also secure its reproduction on a progressive scale.” Marx goes on to say “that the very nature of accumulation excludes every diminution in the degree of exploitation of labor, and every rise in the price of labor, which could seriously imperil the continued reproduction, on an ever enlarging scale, of the capitalist relation.”  That remains a fact of life in the United States, as well as in every other capitalist country.
When Marx reverts to wage questions in Capital, Vol.III, there is certainly none of the “slurring over” of the social element which Browder claims. It is asserted by Marx that the minimum level of wages is determined “by the physical minimum required by the laborer for the conservation of his labor power and its reproduction.” “The actual value of his (the laborer’s) labor-power differs from the physical minimum; it differs according to climate and condition of social development; it depends not merely upon the historically developed social needs which become second nature. But in every country and at any given period this regulating average wage is a given magnitude.”  Marx then goes on to reiterate a more fundamental point, that the absolute level of surplus value is determined by the excess of the unpaid portion of the working day over its paid portion. Here, and not in the actual level of real wages, is the nub of the Marxist critique of capitalism.
Historically considered, the possibilities which the American environment have provided for “the ruthless development in geometrical progression of the productivity of human labor”  – the historical mission of capitalism – have resulted not only in a higher real wage, but also in the creation and appropriation of surplus value on a scale without parallel elsewhere. That surely is the basic fact about American capitalism. The basis for its explanation is fully present in Marx’s writings: they need, of course, to be understood and applied with a full realization of the dialectical complexities of the interacting components of the capitalist mechanism. But there is no special manna which falls from on high upon American workers in the shape of Browder’s “social wage.” Nor has the despotism of capital been loosened simply because American workers in the main do not resemble the “starvelings” or “criminals of want” of the song. But, if this is no longer physically the case, exploitation and alienation are just as characteristic of their position as it is of the underpaid worker of Asia or Africa.
Nor does “impoverishment” begin below the subsistence line of mere physical existence. It can begin anywhere. The American worker deprived of his car or his fruit juice by unemployment or a falling real wage is just as much impoverished. And where his forefathers fought for bread he fights to meet the payments on the home or the refrigerator.
Certainly there is plenty to suggest that under capitalism productivity would rise, and that the results of that would become built into customary living levels. At the same time, employers would try to beat down wages and the inability of capitalism to attain stability would result in the existence of a reserve army of labor at or below subsistence level for the time and place. On the other hand, in periods of prosperity Marx was equally definite that real wages would go up and that workers would live better. He was also definite that while the law of supply and demand “completes the despotism of capital,” when the workers become conscious of this fact they would, by trade unions and other means “try to organize a regular co-operation between employed and unemployed in order to destroy or weaken the ruinous effects of this natural law of capitalistic production on their class.” 
There is no fatalism here. And when a few pages further on Marx expounds the “absolute general law of capitalist accumulation” – concerned with the “industrial reserve army,” he adds, “Like all other laws, it is modified in its working by many circumstances, the analysis of which does not concern us here.” On the following page he adds, “in proportion as capital accumulates, the lot of the laborer, be his payment high or low, must grow worse.” There seems no point in adducing further quotations or seeking for metaphysical meanings. A number of recent discussions may, however, be referred to by the reader wanting to look at the state of the controversy.  At least it can be said that those who like Browder take it for granted that Marx had a dogma of impoverishment, in terms of a declining real wage, always and everywhere, can only be considered to argue in bad faith. In any case it is unsafe to draw general conclusions from an altogether exceptional phase of prosperity. Nor can the net effects of capitalism for the working class, even in America, be assessed according to consumption levels. The intensity of work, the degree of exploitation, the dehumanization of the worker on the job, the degradations of a commercialized society – these have to be put on the other side of the scales. So do the effects of the wars of the twentieth century.
1. Marx, Karl: Letter on the Economic Development of Russia (1877) in The Russian Menace to Europe, ed. Blackstock, P.W. and Hoselitz, B.F., London 1953.
2. Marx, Karl: Capital, Vol.III, p.919.
3. Marx, Karl: Wage-Labor and Capital, Selected Works, Vol.1, p.268.
4. Marx, Karl: Capital, Vol.I, Moore, Aveling ed., p.527-8.
5. Quoted by Browder from a letter of Marx to Engels. In any case this is a legitimate assumption for analytical purposes, and clearly does not imply that all wages, in practice, will be at that level. The trouble is that it is necessary to be aware of the kind of assumptions which Marx is making at any particular stage in his analysis. For example, in working out the relationship between wages and profits – say, what will happen to profits if wages fall – certain features of the prevailing situation have to be held constant, especially the length of the working day and the price of the means of subsistence, but a whole series of other assumptions are implied. For the painstaking manner in which Marx tackles such problems reference should be made, for example, to Capital, Vol. III.
6. Marx, Karl: Capital, Vol.I, p.634.
7. Marx, Karl: Capital, Vol.III, p.1000.
8. Marx, Karl: Capital, Vol.III, p.308.
9. Marx, Karl: Capital, Vol.I, p.655.
10. Strachey, J., Contemporary Capitalism; Gillman, J.M., The Declining Rate of Profit; Germain, E., Y a-t-il une theorie de Marx sur la “pauperisation du proletariat”? in Quatrième Internationale, Vol.15, No.4-6; Meek, R.L., Mr. Strachey’s Economics in The New Reasoner, Spring 1959.
Last updated: 17.12.2005