Capital
Below, I discuss Marx' Capital in four parts. The first part is about the invisible dynamic of value and labor; the second part deals with the struggle for fair work; the third part describes how the foundation for modern capitalism was laid in the Industrial Revolution. The final part is an afterword about Marx' relevance in modern capitalism.
- The Invisible Dynamic of Value and Labor
How products influence our economic thinking
Products play a crucial role in how we collaborate, create, and assign value. We make new purchases every day, often without considering the deeper meaning of those actions. Behind a coat that keeps us warm or bread that feeds us, lies a complex world of labor, relationships, and economic dynamics.
Value is about use and society
A product has value when it meets a need. Without demand, there is no use value; think of leftover vegetables at an auction that are destroyed. At the same time, we utilize some use values, such as oxygen in the air, without direct costs. For others, such as public space, we contribute through taxes. Labor is the key to use value: a baker bakes bread, a tailor sews clothes. The value of products is related to the average labor time needed to make them. Technological progress and efficiency increase labor productivity, allowing products to be produced faster and cheaper. Value is therefore not static, but a dynamic and social phenomenon.
The social foundation of value
Value often seems to originate from the product itself, but that is a misconception. It is the social relationships between people – producers and consumers – that give products value. In traditional societies, these relationships were direct. In our modern economy, they are indirect and occur via goods, services and money. This makes the social origin of value invisible, as if products exist independently of the people who make them. To illustrate this, we can look at Robinson Crusoe. He works on his own needs on his island. His labor and value creation are direct and transparent. In our economy, on the other hand, cooperation and value creation are often hidden under layers of markets and exchange systems.
Barter, money and the evolution of economies
Barter was once the foundation of economic relationships, in which goods were exchanged directly as use value. With the growth of markets, the need arose for a universal measure of value. Metals such as gold and silver were chosen for their durability and divisibility, leading to the development of money. Money acts as a universal equivalent and facilitates trade. At the same time, it creates abstraction, further blurring the social relations that underlie it. The price of a product reflects its value in money, but market factors such as supply and demand can lead to discrepancies between price and intrinsic value.
From money to capital
The evolution from money to capital marked a historical turning point. Capital is not a static asset; it is a dynamic process aimed at accumulation. The formula M → C → M′ (Money → Value → More Money) is about creating surplus value, or profit. Surplus value is created in the production process, where workers work longer than is necessary to earn their wages. This difference – surplus value – forms the basis for capital accumulation. Where earlier forms of capital, such as usury, relied on trade or interest, industrial capital generates surplus directly through the exploitation of labor.
Labor power as the source of surplus value
Labor power is unique among the means of production. It has a value—the cost of enabling the worker to continue working—and a use value: the ability to create more value than it costs. This surplus is the engine of capitalist production. The capitalist buys labor power, but the worker supplies labor in advance, which is essentially a credit to the capitalist. During the workday, the worker produces value to cover his wages (necessary labor) and additional value (surplus labor) that the capitalist appropriates.
The cycle of value and exchange
Commodities and money circulate in a cycle: from production to consumption and back again. Money facilitates this exchange and represents value, but it conceals its social origins.
Innovations such as paper money and credit have further developed this circulation. Credit separates sales and payments in time, which can cause economic crises when payments are not met. Gold and silver remain the ultimate forms of value in international trade, correcting imbalances.
The social reality of value
Our economy is built on social cooperation, but these relationships are often obscured by abstractions such as money and capital. This makes economic relationships seem more like relationships between things than between people. By recognizing that value comes from social labor, we can better understand how the economy works – and how we can improve it.
Rather than being a something fixed, value is a dynamic process, rooted in labor and social relations. By understanding these core principles, we can not only make the economy more efficient, but also fairer and more transparent. If we make the social origins of value visible, we can act more consciously in our production and consumption patterns.
- The struggle for fair work
Capitalism, while a remarkable engine of productivity and innovation, is marked by inherent contradictions that shape its dynamics and struggles. A central axis of this conflict revolves around the working day and the distribution of its fruits: the necessary labor that sustains the worker and the surplus labor that fuels capitalist profit.
The anatomy of the working day
The working day is the heartbeat of capitalist production, divided into:
- Necessary Labor Time: The hours a worker spends earning wages equivalent to their subsistence needs.
- Surplus Labor Time: The additional hours worked, generating surplus value—the lifeblood of capitalist accumulation.
The length of this day is not fixed; it stretches and contracts under the weight of class struggle. Workers, seeking to preserve their health and dignity, resist excessive hours, while capitalists aim to extend the working day to extract maximum surplus value. Historical battles over this boundary have defined the contours of labor rights, from early industrial legislation to modern work-hour limits.
The Surplus Product and Capitalist Wealth
The surplus product—the tangible output of surplus labor—defines the wealth of capitalist societies. Its size relative to necessary labor is a critical metric of economic success. For instance, if 20 pounds of yarn are produced in a day, with 2 pounds representing surplus value, the capitalist's prosperity depends on expanding the proportion of surplus over necessary output.
This relationship reveals a stark reality: the capitalist's gain is tethered to the worker’s exploitation. Increasing the surplus product requires extending surplus labor time, often at the expense of worker well-being. This tension underpins the historical and ongoing battle over working hours.
Historical struggles and legal interventions
The fight over the working day has repeatedly led to state intervention, exemplified by the Factory Acts in 19th-century England. These laws, prompted by worker resistance and public outcry, limited working hours and sought to mitigate exploitation, particularly for vulnerable groups like women and children. Yet, capitalists consistently found ways to circumvent regulations, employing tactics such as extending break times or manipulating shift rotations.
The myth of the "last hour" of work being the sole source of profit, propagated by economists like Nassau Senior, further underscores the capitalist narrative. In reality, profits emerge from the totality of surplus labor extracted throughout the working day, not a specific segment.
The industrial reality of exploitation
From Nottingham's lace industry to Staffordshire's pottery workshops, industrialization brought unparalleled productivity—and exploitation. Workers, including children as young as nine, endured grueling hours in hazardous conditions. The health toll was staggering, with diseases like "Potter's Asthma" or "phossy jaw" becoming common among laborers. Entire industries exemplified how capitalism prioritized profit over human dignity, sparking outrage and demands for reform.
Machinery and its contradictions
The advent of machinery introduced new dimensions to this dynamic:
- Increased Productivity: Machines enabled mass production, but often displaced skilled labor, creating waves of unemployment and intensifying the exploitation of remaining workers.
- Extended Working Hours: Capitalists sought to maximize machine utilization by extending shifts, leading to worker exhaustion and heightened exploitation.
- Labor Intensification: Even as legal limits on hours were introduced, productivity expectations rose, pushing workers to produce more in less time.
Machinery, heralded as a symbol of progress, became a double-edged sword—enhancing output while alienating and dehumanizing labor.
Global Implications of Labor Struggles
The struggle for a "normal working day" transcends national borders, reflecting universal tensions between labor and capital. In France, the February Revolution of 1848 introduced a 12-hour workday law, while the United States witnessed an eight-hour day movement post-slavery abolition. The international labor movement, as highlighted by the 1866 Geneva Workers’ Congress, recognized that limiting working hours was foundational to broader social reforms.
Cooperation and manufacturing
Capitalist production thrives on the cooperation of labor. By centralizing workers in factories, capitalists harness collective productivity, transforming individual efforts into an efficient whole. However, this system also fragments worker autonomy, reducing individuals to "partial workers" performing repetitive tasks. This division of labor, while increasing output, alienates workers from the fruits and meaning of their labor.
The rise of manufacturing, with its systematic division of tasks, marked a critical phase in capitalist development. Yet, its inherent inefficiencies and reliance on manual labor set the stage for the industrial revolution and the mechanization that followed.
A just workday
The quest for a just and humane working day remains a defining feature of labor struggles. The victories of English factory legislation, though hard-won, serve as reminders of the importance of collective action and state intervention. They also highlight the limits of reform within a system driven by profit maximization.
As the global labor movement continues to confront the challenges of automation, intensification, and precarious work, the fight for fair working conditions, equitable distribution of surplus value, and recognition of labor's dignity is far from over. By revisiting these foundational struggles, we see the enduring dynamics of capitalist production—and the resilience of workers.
- The foundations of modern capitalism in the industrial revolution
The industrial revolution was a transformative period in human history with consequences for economies, societies, and global systems. Beneath the marvels of mechanization and economic growth Marx saw a narrative of labor exploitation, environmental degradation, and systemic inequalities.
Hidden costs of industrialization
Exploitation in cottage industries
The industrial revolution brought large changes to traditional domestic and cottage industries like lace-making and straw plaiting. These small-scale, home-based manufacturing systems often relied on the labor of women and children, some as young as five years old. Workers endured up to 15-hour days in unsanitary, poorly ventilated environments, earning minimal wages. This exploitation contributed to severe health issues, including a rise in tuberculosis among lace workers, and perpetuated a cycle of poverty and illiteracy.
Child labor and systemic inequalities
Children were forced into labor by economic necessity. Deprived of education and subjected to harsh conditions, they became victims of a system that prioritized profit over welfare. Legislative attempts to regulate child labor, such as the Factory Acts, were often met with resistance from industrialists who argued that reforms would increase costs and disrupt operations.
Capitalism’s impact on agriculture and society
Mechanization and rural displacement
The mechanization of agriculture during the industrial revolution disrupted traditional farming practices and replaced small-scale peasant farming with large-scale capitalist agriculture. While machinery increased productivity, it also displaced rural laborers, and this led to a decline in the rural population. The push for efficiency prioritized profits, often at the expense of sustainable farming practices and the well-being of rural communities.
Environmental degradation
The capitalist drive for productivity resulted in the overexploitation of natural resources. In agriculture, this led to soil exhaustion and disrupted nutrient cycles between rural and urban areas. The environmental degradation caused by these practices not only undermined sustainable agriculture but also threatened long-term food security and public health.
Marx' perspective on labor exploitation
Absolute and relative surplus value
Marx wrote that capitalists extract absolute surplus value by extending working hours and relative surplus value by increasing productivity through technological advancements. This dual approach intensifies the exploitation of labor, embedding systemic inequalities within the capitalist mode of production.
The wage illusion
According to Marx, the capitalist wage system obscures the reality of labor exploitation. By presenting wages as the price of labor, the system conceals the distinction between necessary labor (reproducing the worker’s wages) and surplus labor (unpaid labor appropriated as profit). This creates an illusion of fairness, while underlying power imbalances and the true extent of exploitation are hidden.
Capital accumulation and its contradictions
Primitive accumulation
The historical foundation of capitalism—termed primitive accumulation by Marx—was the violent expropriation of peasants from their lands. Enclosures in England and the Highland Clearances in Scotland are examples of this process, which forcibly separated producers from their means of production. This created a class of landless laborers, dependent on wages, and laid the groundwork for capitalist production.
Capitalist accumulation and the reserve army of labor
As capital grows, the demand for labor becomes increasingly unequal. Mechanization and technological advancements reduce the need for workers, which creates a surplus labor population—Marx’s industrial reserve army. This surplus serves the capitalist system by lowering wages and ensuring a ready supply of labor during economic expansions.
Social and economic consequences
Disruption of traditional family structures
Industrialization disrupted traditional family structures, as women and children were drawn into harsh labor conditions outside the home. The loss of a nurturing family environment and the prevalence of exploitative practices were the societal costs of unregulated capitalism.
Global inequalities and colonial exploitation
Capitalism’s expansion was not confined to Europe. Colonies served as laboratories for capitalist practices, providing raw materials and markets while subjecting indigenous populations to systemic exploitation. The imposition of artificial land prices and forced labor in colonies is an example of how capitalism thrived on dispossession and inequality.
Towards a cooperative future
Reform and resistance
Legislative reforms, such as the Factory Acts and public health measures were early attempts to address the excesses of industrial capitalism. These efforts fell short, because they were hindered by uneven enforcement and resistance from powerful industrialists. The persistence of exploitation in less-regulated sectors shows the need for comprehensive systemic changes.
Marx’s vision of collective ownership
Marx’s analysis suggests that capitalism, despite its technological and productive achievements, sows the seeds of its own dissolution. The concentration of wealth and the advancement of cooperative labor point towards a future where collective ownership and democratic economic practices could replace capitalist exploitation.
Conclusion
The industrial revolution and the rise of capitalism transformed the global economy but left a legacy of exploitation, inequality, and environmental degradation. By reimagining economic systems to prioritize human welfare and sustainability, we can honor the sacrifices of those who toiled under harsh conditions and pave the way for a more equitable and humane future.
Afterword - Marx in Modern Capitalism
Karl Marx’s critique of capitalism still gives us a critical perspective into the systems that influence our economies and societies. Central to his analysis is alienation—a condition where individuals lose a sense of ownership and connection to the products of their labor, their colleagues, and even themselves. Under capitalism, Marx argued, workers become fragmented, reduced to mere tools for profit, their worth measured solely by their wage. This dehumanizing effect, which Marx foresaw, remains relevant in the modern workplace.
Class dynamics and inequality
Marx’s framing of society into two primary classes—the proletariat (workers) and the bourgeoisie (owners of production)—makes us understand structural inequalities. The middle class, according to Marx, is destined to erode under the pressures of capitalist systems. Modern parallels can be drawn as income disparities widen and economic precarity becomes a common experience for many workers globally.
While the bourgeoisie are celebrated for innovation and risk-taking, Marx cautioned against unchecked capitalism that leaves workers with shrinking freedom. He argued that when jobs are scarce, workers lose bargaining power, and become more constrained than historical slaves, who, though exploited, were at least assured sustenance. So, freedom is fragile in economies where the supply of labor far exceeds demand.
The trade of labor as a commodity
One of Marx's most poignant critiques lies in the commodification of labor. In capitalist systems, everything—including human effort—is given a price. Labor becomes a tradeable good, stripped of its inherent dignity and value beyond its market worth. For Marx, this was a moral and philosophical failure; it reduced individuals to economic units, perpetuated alienation and eroded the potential for humans to fully express their talents and creativity through work.
Where Marxism went wrong
Though Marx' criticism of capitalism is still relevant, the practical implementation of Marxism came with serious consequences. Insisting on centralized economic planning led to inefficiencies, corruption, and resource misallocation, as witnessed in many socialist regimes. This undermined Marx’s vision of a liberated proletariat and instead embedded new forms of authoritarianism and inequality.
Further, the reduction of class struggle to an economic binary oversimplified the complexity of social stratification. Critics pointed out that modern societies are influenced not just by economic relations but also by intersections of identity, culture, and politics. The failure to account for these dynamics has made many of Marx’s predictions—such as the inevitable collapse of capitalism—untenable.
The broader implications
Marx’s assertion that economic relationships drive historical change led to vigorous debate. His reliance on historical materialism ignored the interaction of culture, ideas, and human agency in societies, Max Weber later wrote. Why Marx is still relevant, then? This lies in his framing of humans as fundamentally creative beings—homo faber, or "man the maker". He warned against the capitalist tendency to reduce this creativity to a transaction, robbing work of its transformative and self-affirming potential. In today’s world, where markets dominate and labor is increasingly transactional, Marx’s fears seem visionary. While technology and globalization have opened opportunities, they have also intensified disparities; the commodification of labor and alienation remain persistent issues.
Closing thoughts
Marx was not merely critiquing the economic systems of his time but he offered a vision of what human labor could be—a means of self-realization, collaboration, and creation. His discomfort with the idea of work as just a commodity challenges us to rethink our systems and priorities. The failures of Marxism in practice remind us that no single theory can fully capture the complexity of human societies or predict their evolution.
Instead, we can draw from Marx’s critique a way of questioning the ethical foundations of our systems and envisioning a future where work supports connection, purpose, and dignity for all. In doing so, we might find ways to address the alienation he sought to overcome while avoiding the dogmatic errors that limited Marxism’s practical application.
Sources used:
- Marx, K. (2018 [1872]), Das Kapital, Köln: Anaconda Verlag GmbH.
For the afterword:
- Heerikhuizen, B. van (2015), Classical Sociological Theory, Massive Online Open Course, Amsterdam: Universiteit van Amsterdam.