Marx quotes Ricardo to the effect of the argument I set out earlier.
"Diminish the cost of production of hats, and their price will ultimately fall to their own new natural price, although the demand should be doubled, trebled, or quadrupled. Diminish the cost of subsistence of men, by diminishing the natural price of food and clothing, by which life is sustained, and wages will ultimately fall, notwithstanding the demand for labourers may very greatly increase." (p 49)
As Marx says, Ricardo's language, here, may be cynical, equating workers to hats, but that cynicism, actually dispassionate, scientific analysis of reality, is simply a reflection of the way capitalist production does operate.
“The cynicism is in the facts and not in the words which express the facts. French writers like M.M. Droz, Blanqui, Rossi and others take an innocent satisfaction in proving their superiority over the English economists, by seeking to observe the etiquette of a “humanitarian” phraseology; if they reproach Ricardo and his school for their cynical language, it is because it annoys them to see economic relations exposed in all their crudity, to see the mysteries of the bourgeoisie unmasked.” (p 49)
Marx sums up, thereby, that the value of labour-power is nothing more than the minimum wage. Engels, in a footnote, however, elaborates on this point that became manifest in Lassalle's Iron Law of Wages, as well as later, in the form of Varga's Law, and other crude forms of theories of immiseration. Engels notes that it was, in fact, he that had first proposed the idea in 1844, in “Outlines of a Critique of Political Economy” (Deutsch-Franzoische Jarbucher), which Marx adopts, here. However, on the basis of Marx's later research and analysis, they both ditched this early, crude notion.
“Although, however, in reality wages have a constant tendency to approach the minimum, the above thesis is nevertheless incorrect. The fact that labour is regularly and on the average paid below its value cannot alter its value. In Capital, Marx has put the above thesis right (Section on Buying and Selling Labour of Power) and also (Chapter 25: The General Law of Capitalist Accumulation) analysed the circumstances which permit capitalist production to depress the price of labour power more and more below its value.” (Note *, p 49)
Marx, also examines this in The Grundrisse, and sets out the basis of a secular rise in workers' standard of living, even as their exploitation increases, because of rising social productivity, itself driven by The Law of Value. It is the basis of The Civilising Mission of Capital. He also sets out there that difference between this growing affluence of workers, i.e. rising revenue/consumption, at the same time as their growing poverty, i.e. reduction in the amount of productive wealth in their individual possession.
The independent labourer first loses their own means of production, then the process of centralisation and concentration of capital means that the minimum size of capital required for production grows to an extent it makes it impossible for small producers to accumulate it to compete. Then it grows to such mammoth proportions that not even the largest private capitalists can afford it, so that the monopoly of private capital becomes a fetter on further development, which is overcome by their expropriation by huge socialised capitals, in the form of cooperatives and joint stock companies.
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