But, between that minimum and maximum of wages, there is an infinite variation. Marx, then, sets out what determines where this settles, and why it always means that capital has the upper hand, and that it is strengthened, over time, as against labour. This does not contradict what was said earlier about crises of overproduction arising when wages squeeze profits. The rise in wages does not result in the mass of profits disappearing, only that it stops growing, as Marx describes, in Capital III, Chapter 15, and in Theories of Surplus Value, Chapter 21.
In other words, if total capital is £1 million and profits £100,000, an increase in capital to £1.2 million, and consequent rise in employment, leads to rising wages to an extent that profits remain at £100,000. The additional £0.2 million of capital does not act as capital, because it does not self-expand, does not produce additional profit. It has been overproduced, relative to labour. But, this illustrates the point, because, at this point – where the rate of profit falls, because of a fall in the rate of surplus value, which is a quite different condition to that of The Law of the Tendency for the Rate of Profit to Fall, described by Marx, where the rate of surplus value rises – of crisis, labour is thrown out. Capital responds by replacing labour with machines.
“The fixation of its actual degree is only settled by the continuous struggle between capital and labour, the capitalist constantly tending to reduce wages to their physical minimum, and to extend the working day to its physical maximum, while the working man constantly presses in the opposite direction.
The matter resolves itself into a question of the respective powers of the combatants.” (p 88)
But, this begs the question of what determines these respective powers, and why it varies at different phases of the long wave cycle.
Marx notes that, as far as the working-day was concerned, the matter had never been resolved without legislative intervention. In other words, capital in general, via its state, had to regulate the damaging competition between the many individual capitals. The workers continually pressed for such laws, as against having to negotiate with individual employers, but without success until some of those employers also favoured such regulation. Even where laws were introduced, they were often flagrantly breached. As Marx says, in Capital I, its only when some of the larger employers recognised that competition would prevent any limitation without such laws that regulation becomes effective. As Marx notes, in The Poverty of Philosophy, this is the reality that laws simply rubber stamp what has already become material reality, and as capital develops, this material reality changes, requiring greater regulation.
In The Poverty of Philosophy, Marx says in response to Proudhon, that, in England, parliament had to repeal The Combination Acts that made unions illegal, and that was simply a reflection of reality, as it had developed under pressure of capital accumulation.
“Parliament had to modify the law in order to bring it more and more into line with the conditions resulting from free competition, it had of necessity to abolish all laws forbidding combinations of workers. The more modern industry and competition develop, the more elements there are which call forth and strengthen combination, and as soon as combination becomes an economic fact, daily gaining in solidity, it is bound before long to become a legal fact.”
As Engels also points out, in his later Prefaces to The Condition of The Working Class, it reflected the fact that the larger capitals no longer required those methods, and regulation acted to their benefit, against the smaller capitals.
“The competition of manufacturer against manufacturer by means of petty thefts upon the workpeople did no longer pay. Trade had outgrown such low means of making money; they were not worth while practising for the manufacturing millionaire, and served merely to keep alive the competition of smaller traders, thankful to pick up a penny wherever they could. Thus the truck system was suppressed, the Ten Hours’ Bill was enacted, and a number of other secondary reforms introduced — much against the spirit of Free Trade and unbridled competition, but quite as much in favour of the giant-capitalist in his competition with his less favoured brother. Moreover, the larger the concern, and with it the number of hands, the greater the loss and inconvenience caused by every conflict between master and men; and thus a new spirit came over the masters, especially the large ones, which taught them to avoid unnecessary squabbles, to acquiesce in the existence and power of Trades’ Unions, and finally even to discover in strikes — at opportune times — a powerful means to serve their own ends. The largest manufacturers, formerly the leaders of the war against the working-class, were now the foremost to preach peace and harmony. And for a very good reason. The fact is that all these concessions to justice and philanthropy were nothing else but means to accelerate the concentration of capital in the hands of the few, for whom the niggardly extra extortions of former years had lost all importance and had become actual nuisances; and to crush all the quicker and all the safer their smaller competitors, who could not make both ends meet without such perquisites. Thus the development of production on the basis of the capitalistic system has of itself sufficed — at least in the leading industries, for in the more unimportant branches this is far from being the case — to do away with all those minor grievances which aggravated the workman’s fate during its earlier stages.”
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