From American Socialist, May 1958. 
Copied from the American Socialist Archive in ETOL.
Marked up by Einde O’Callaghan for the Marxists’ Internet Archive.
Proofread by Chris Clayton (July 2006).
BUT, as I pointed out earlier, if it is hard to prove a relative gain for labor as compared with capital, there is no doubt at all that labor, in the advanced capitalist countries, has enjoyed a great rise in living standards over past century. It is this fact more than any other which has inspired the disputes among socialists, which have been recurring for more than half a century, about Marx’s so-called ‘law of increasing misery’ and ‘subsistence’ wage theory. The background for these disputes is as follows: Marx concluded the first volume of his major work with a five-chapter treatise on the accumulation of capital where he fits together the simpler elements he had abstracted earlier. Within this part, there is a chapter called General Law of Capitalist Accumulation, and within chapter there is formulated a law of polarization of wealth, increase of capital balanced by increase of misery, which the controversial ‘theory of increasing misery’ been lifted. Friend and foe alike have generally interpreted this as a theory that wages must tend to fall, and disputed it accordingly.
Marx did at one time clearly state a ‘law’ that wages tend to fall, in his series of 1847 lectures published age as Wage Labor and Capital. Here he gave the opinion as the worker loses his specialized craft skills, competition between workers would force wage rates to decline. Within a few years, however, he was rejecting this generalization, and condemning Lassalle for accepting the ‘iron law of wages’ which Ricardo had taken over from Malthus. When he sat down, in the fullness of developed thought, to discuss the fate of the worker in modern capitalist industry, in the chapter on capitalist accumulation mentioned above, he appeared to exclude falling wages from the galaxy of evils which he predicted, saying: ‘The result is that, in proportion as capital accumulates, the condition of the worker, be his wages high or low, necessarily grows worse.’
Marx’s careful reservation, which I have italicized above, has quite naturally escaped wide notice, as the pounding of his artillery on the theme of ‘growing misery’ drowned it out. It must strike us today, after we have seen to what extent real wages can rise, as unnecessarily grudging. But, grudging though it may have been, his concern with this point of his theory was real enough, as was shown in 1875, several years after the publication of Capital, when he turned the rough side of his tongue on the program elaborated by the German Social Democrats at the Gotha congress. Lassalle’s followers had inserted therein the ‘iron law of wages.’ Marx called this ‘a truly revolting retrogression.’ He again repeats that his condemnation of ‘wage slavery’ does not depend on whether the laborer’s pay is ‘better or worse,’ and adds: ‘It is just as if among slaves who had at last penetrated the mystery of slavery, and had risen in rebellion, a slave, imbued with superannuated notions, inscribed on the program of the rebellion: “Slavery must be abolished, because under the system of slavery the slaves” food can never exceed a certain low maximum’
This anxiety that his theory not be hinged to any particular level of wages shown by Marx was probably intensified by the rise in real wages which could be observed in his own lifetime.
On the purely theoretical level, Marx’s analysis was built of ratios, comparisons, and proportions, not absolutes. The massive development in the general theory of capitalist accumulation is based entirely upon the relationship between paid and unpaid labor. It is from this that Marx develops his economic conclusions, and most important of all, it is from this that he draws the class structure of his day – the ‘polarization of wealth and poverty’ at the core of his thought.
NONE of this is intended to demonstrate that Marx’s analysis was either flawless or clairvoyant. On the contrary, it suffers badly from the obsolescence which attacks even the best of theories when they do not get the corrections called for by the passage of time and events. Marx cast the general law of capital accumulation in a rhetoric which was appropriate to the conditions of his day. In our day, as Strachey rightly maintains, many of these things are quite different. Engels, towards the end of his life, was to recognize that the capitalist system had ‘outgrown the juvenile state of exploitation described by me’ fifty years previous, and expressed the hope that the workers would be more able to concentrate on opposing ‘the capitalist system itself,’ instead of merely specific early conditions. Today, we need that recognition far more than Engels was able to imagine.
While the relationships between paid and upaid labor still obtain, of the three major ways that Marx mentioned for an increase in unpaid labor – longer working day, increasing productivity, and increased intensity of exertion – it is chiefly the second which has come into play. The unions had a lot to do with this, as Strachey says, but regardless of the reason, increased profit has been extracted chiefly by increased productivity, thus allowing a great and unforeseen rise in wage levels, even while maintaining roughly similar proportions of paid and unpaid labor.
In a few countries at least, the standard of life of the working class has consequently been raised and is for long periods regularized. It is well above that of the classes it continues to supplant. The transformation of impoverished farmers into wage workers is no longer taken as prima facie evidence of immiseration. The brutalizing process by which the working class was formed has receded into history. Thus the class structure which Marx described with bitter intensity in his own day exists today in greatly altered conditions, and no attempt at presenting the general law of capitalist accumulation in traditional Marxist rhetoric can get across to the average person, who is, in a way, the best judge of the matter.
Judged in the light of Marx’s total analysis and not in the form of a much-debated fragment of a paragraph, the trouble is not ’original error but uncorrected obsolescence,’ to borrow the phrase of an economist from another school. To defend Marx’s description of the conditions which this law brought about in his own day as a true description of present conditions would be nothing less than dogmatism raised to frenzy. But the operation of this law creates problems of a new kind in our own era. There is no more powerful way of analyzing the movement of a capitalist economy than the working out of a relationship between the accumulation of capital and the demand for labor, which is the way Marx attacked the problem. In recent years, orthodox economics has been able to regain some usefulness only by, through Keynes, approximating this method of analysis, although in a diluted and superficial form. There is no way of getting around the fact that, though standards of life have risen and the entire economy has moved to a higher plateau, it is Marx’s ‘law of motion’ of capitalism which explains most profoundly the system’s repeated difficulties, and that the greatest of these crises came, not in Marx’s day, but in our own.
IF we apply this same approach to Marx’s ‘subsistence wage’ theory, we get much the same result. Marx had advised that wages fluctuate around a level sufficient to maintain, perpetuate, and train a working class. Strachey points out that real wages of British workers have doubled since Marx’s day, and more than tripled in America; he therefore rejects the theory, calling it Marx’s ‘original error’ which drove ‘a great hole’ into his entire system. [Earl] Browder draws Strachey’s view out to its most explicit, and, using simple arithmetic, finds that the American worker is now getting at least six times a ‘subsistence’ wage. The reasoning: As Marx called the wage of British mid-nineteenth century worker ‘subsistence,’ and as the American worker is today getting, according to figures, more than six times that amount in real wages, the pay of the American worker is five parts ‘social increment’ over and above subsistence. (Fortunately, Browder did not use the pay of the Chinese coolie at the time of the Opium Wars as his base, or we should find ourselves getting a pay a thousand times above subsistence.)
The fact that all the budgets calculated, by US government agencies or universities, to provide a ‘minimum of health and decency’ are, year by year, regularly above the average of labor wages ought to warn us there is thing faulty about the approach. Obviously, no working-class family can manage any kind of subsistence at all on one-sixth the present average wage, which would only be some $12-$13 a week. Marx took care of the by explaining that ‘subsistence’ varies with the place and the time, as wages include, ‘in contradistinction to value of other commodities, a historical and moral factor.’ Obviously then, the term ‘subsistence’ was not intended to convey any single level of wages, nor was it technically bound up with any special emotional content.
The point here is not to go over elementary tenets of Marx’s economics, but to recall once more that the difficulties of the theory stem not from ‘original error but uncorrected obsolescence.’ Unquestionably, a class on the present level of the American workers cannot be expected to take literally the words of the traditional socialist anthem: ‘Arise, ye prisoners of starvation.’ In that sense Marxism requires a modernization to suit the present world; Strachey is absolutely right in that general claim. But can we throw away economic concepts without which it is impossible to understand our present system? No theory of wages can be accurate if it excludes Marx’s concept, regardless what words are used to encompass it, because it is the only way in which the division of society into classes, one of which accumulates while the other returns each morning to the factory or office to renew the terms of its existence, can be explained. To start to play at this late date with the notion that ‘wages have climbed to six times subsistence,’ which is to say that the worker can earn in his first eight years of labor enough to support his family for an entire 48 even without investments, we will turn the world of capitalism into an inexplicable mystery.
In the foregoing discussion, no attempt has been made to deal with the subject as a whole. One or two specific current quarrels, as they have come up in the European controversy described at the start of this article, have been considered in an effort to sketch out an approach to the problems of socialism in the advanced capitalist countries. Much discussion of a more comprehensive nature is plainly needed. Here there remains space only to outline the dimensions of the problem, which appear to me as follows:
All the above difficulties in Marxism obviously stem from the fact that the capitalist system has persisted, and restabilized itself repeatedly, over a much longer period than had been expected. The great expansion in labor productivity which has created such new and different conditions was not unexpected in the Marxian economic structure, a structure which, as no other before or since, focused on the technological revolutions which capitalism is forced to work continuously as a condition of its existence. What was unexpected was capitalism’s length of life and its ability to expand. Marx and the movement he shaped operated on the basis of imminent crisis. If he never gave thought to the kind of living standard inherent in a capitalism that would continue to revolutionize science and industry for another hundred years, that was because he thought he was dealing with a system that was rapidly approaching its Armageddon. He thought the social wars that would usher in socialism would take place under the social conditions he saw around him. In that sense, the economic obsolescence we can easily find in him today is of a piece with his errors of political foreshortening.
Now we live in a day and age where socialism, while clearly on the order of the historical day, will shape up under conditions far different from those under which the socialist movement was originally given its stamp.
Every movement develops its own style, rhetoric, way of making itself heard. Socialism was cradled in the intolerable conditions of the primitive working class, and flamed with the barricades spirit of the revolutions of 1848 into which it was launched at its infancy. Instead of evolving with changed conditions, this tone and approach survived in frozen rigidity which sometimes even outbid Marx. One of the main reasons was that the first of the long-awaited revolutions broke out in a country whose condition was more appropriate to the Europe of the early nineteenth century than the early twentieth, and whose social struggles reflected that fact. Then, to compound the difficulty, that revolution got ossified and bureaucratized at the top, and insisted on imposing its every prejudice and dogma on the world socialist movement. The result was a Communist formation, the recognized repository of ‘Marxism,’ with a Zeitgeist from another century and a paralyzed mentality. Is it any wonder that the work of digging out Marxism and restoring it to usable form is so difficult?
If the thought is right that the trouble lies not in original error but uncorrected obsolescence, then the job is not to see where ‘Marx was wrong’ so much as to make a fresh application of his theory to the world around us as it is, not as it once was. To borrow a comparison from the field of physics, we need socialist Faradays and Maxwells or if we are lucky, Einsteins and Plancks, not people who confine themselves to knocking Isaac Newton.
1. Sometimes it seems that no question gets more attention than whether Marxism is based on a concept of ‘immiseration’ of the working-class. I have never seen a more lucid reply to this question than the one given by Harry Braverman in the course of May 1958 article in the American Socialist titled Marx in the Modern World. It is given as part of a long and interesting reply to John Strachey, the English Labor Party official who had been in the British CP during the 1930s. Strachey argued in Contemporary Capitalism that Marx not only defended a theory of ‘immiseration’ but had been proven wrong.
Last updated on 19.7.2006