Value, Price and Profit¶
Core Argument¶
This posthumously published lecture, delivered in 1865 to the General Council of the First International, represents Marx's most accessible exposition of the core arguments of Capital, Volume I. Written to refute the claims of Citizen Weston, who had argued that general wage increases were futile and dangerous, the text systematically dismantles the theoretical foundations of this position while demonstrating Marx's patient commitment to making his ideas plain.
Weston's argument rested on two false premises: that national production is a fixed quantity and that real wages are a fixed amount. Production changes continuously through capital accumulation and shifts in productive power; even if total production were constant, the division between wages and profits could still vary. Weston's bowl-of-soup analogy—in which workers are limited only by the smallness of their spoons—fails because a general wage rise would merely alter the composition of demand, not its aggregate. Capital and labour would transfer between sectors until the general rate of profit equalised, leaving commodity prices unchanged but the rate of profit permanently lower.
The historical record refutes Weston's predictions. The Ten Hours Bill of 1848, denounced by economists Ure and Senior as ruinous, actually saw money wages rise, employment increase, product prices fall, and markets expand. From 1849 to 1859, agricultural wages rose forty per cent while wheat prices fell sixteen per cent and pauperism decreased. The currency objection—that wage rises require impossible increases in money supply—is equally false; England's perfected payment mechanisms could accommodate a fifty per cent wage rise with minimal additional coinage.
Marx proceeds to his positive theory. The value of a commodity is determined by the quantity of socially necessary labour crystallised in it, measured in time with skilled labour reduced to simple labour. Price is merely the monetary expression of this value; market prices oscillate around value through supply and demand but average out over time. Profit cannot arise from selling above value; it must be explained on the basis that commodities sell at their values.
The key is the distinction between labour and labouring power. What the worker sells is labouring power, whose value is determined by the necessaries required to maintain the worker and raise a family. The capitalist buys this commodity at its value, but its use-value is the capacity to work longer than the time needed to reproduce that value. This surplus labour creates surplus value, decomposed into rent, interest, and industrial profit. The wages system masks this distinction, unlike slavery or serfdom where the division between paid and unpaid labour is visible.
The value of labour is not fixed but variable, containing a physical element (subsistence) and a historical or social element (a traditional standard of life). Between the physical minimum of wages and the physical maximum of the working day lies an immense scale of variation, settled by continuous struggle. Capital constantly tends to reduce wages to the minimum and extend the working day; the limitation of the working day has never been achieved except through legislative interference, requiring continuous working-class pressure. In merely economic action, capital is the stronger side.
The general tendency of capitalist production is to sink the average standard of wages towards its minimum, because the constant portion of capital (machinery, materials) grows relative to the variable portion (wages) as industry progresses. Yet workers should not abandon resistance: in ninety-nine cases out of a hundred, wage struggles merely defend the given value of labour, and cowardly surrender would disqualify workers from initiating any larger movement. However, workers must not exaggerate the ultimate effect of these everyday struggles—they fight effects, not causes, retarding the downward movement without changing its direction. The conservative motto "A fair day's wage for a fair day's work" must be replaced by the revolutionary watchword: "Abolition of the wages system."