June 9, 2021 | 6 minutes read | Tags: Capitalism 101

Capitalism 101 - Class, Private Property and Wage Labour

In the second instalment of the series, we are discussing Class, Private Property and Wage Labour. What is private property, and how does it shape our relationship to capital? What is wage labour, and how do the capitalists use it to exploit us? What is class, and why is class struggle inevitable?

Capitalism 101 - Class, Private Property and Wage Labour

You can read the first instalment in our Capitalist 101 series, ‘The Commodity’, here.

“The history of all hitherto existing societies is the history of class struggles.” With these decisive words, Marx began the first chapter of the Communist Manifesto, which lay clear the aims and action of the international Communist movement. This article will explain the ways in which the concepts of class, private property, and wage labour relate to each other, and elaborate on their centrality to Marxist theory. The article will end by tying these three concepts into the core of Marxist thought and practice: class struggle.

What is private property?

To understand private property, one must first understand the basics of commodity production, as explained in the previous article. To put it briefly, a commodity is an object, a service, or any kind of exchanged good which is produced by human labour, for the purpose of exchange in order to generate a profit (more on that later). In order to create most commodities workers need tools, machinery, factories and farms. These instruments and locations are called the means of production. While these are industrial examples, any tool or machine used in the production of a commodity or good comes under this banner, such as coffee machines in a fast-food restaurant, computers in an office, or the phones and technology of a call centre.

In our current capitalist mode of production, the means of production are operated by the working class, but owned by members of the capitalist class, who extract profit from the workers’ labour. ‘Private Property’ is the term that describes this ownership of the means of production by a property owner who generates profit from the labour of the workers. This is distinct from personal property, from which a property owner does not generate profit - such as one’s kitchen, car, or toothbrush. Therefore, when a socialist claims to want to ‘abolish private property’, it does not mean we desire for everyone to live with everything in common, but that we want to end the extraction of profit and wage labour, through common ownership of the means of production.

What is wage labour?

Wage labour is the name given to the predominant relationship existing between the working class and the capitalists who employ them. Under capitalism, a worker sells their labour power (i.e., their ability to do work) for a given wage, which is determined, as all commodities are, by variations around the cost of production, according to supply and demand. This is distinct from selling one’s labour (i.e., the actual process of production), as in this contract the labour has not yet been performed. Instead, the worker sells their potential labour to a capitalist for a certain time, or for the performance of a certain task or tasks. It is under this agreement, however, that exploitation in the form of profit extraction occurs.

An example will illustrate how this occurs - this one adapted from Engels’ introduction to Marx’s ‘Wage Labour and Capital’. A worker enters a workshop on a wage of £100 per day. Through their labour they add £200 of value to the raw materials, and the capitalist sells the product and realises that value (gets £200). Out of this, the worker is paid the £100 agreed in their contract, but the capitalist keeps the remaining £100 for themselves.

If, in half a day the worker has already made the £100 that the capitalist will pay them with, then in half a day they are even - the worker generates £100 of value for the capitalist, and the capitalist recompenses the worker’s time with £100. Although the worker has already generated the £100 they will be paid for a full day's labour, they have only fulfilled half of the time that they are contractually obliged too. Therefore, the second half of the day is spent not working in fair recompense for the work they are doing, but solely to create profit for the capitalist they are working for. Working for nothing but the basics of life: food, drink, and shelter, is a relationship of coercion. If the worker does not wish to have the surplus value they generate extracted from them, then they may ‘choose’ unemployment, homelessness, and starvation. This is the ‘free choice’ offered by capitalist society. In other words - no choice at all.

What is class?

In the above sections, we referred to ‘workers’ and ‘capitalists’. These are both classes, but some explanation is needed. In short, a class is a certain group which has a unique relationship to the means of production. Classes, like the means of production themselves, develop and evolve as technology and social structure advances. For example, the feudal aristocracy, while once completely dominant in Western Europe, was either absorbed or made irrelevant by the capitalist class in the 19th Century, where their ownership of factories, and thus greater ability to sell commodities, gave them a much more powerful position than previously.

In modern Britain, ‘class’ has associations largely with income bracket and social culture (factors including geographical region, accent, and personal appearance and fashion). While these may indicate one’s class background, it is not the be-all end-all of what constitutes one’s class position.

In our current society, there are three major classes that make up British society:

The working class, also referred to as the proletariat, is the majority of the population. This is the class of people who do not own private property, but only work for a wage (either hourly or piece), and are thus irreconcilably exploited.
The petty (or petite) bourgeoisie is the most difficult to define, but generally are small capitalists who own some property (e.g. a small business or tradesman), but work alongside the working class, such as shopkeepers, or private legal or medical practitioners.
The bourgeoisie, or the capitalists, are the highest class in society. They are the owners of the means of production, and make a living by extracting profit from their workers. In capitalist society, the state is organised and run by this class. For more information on class-rule through the state, look out for our 101 on the subject!

It is important to note that certain classes, such as landlords, do not fit neatly into this - a landlord can be bourgeois or petty bourgeois, depending on the scale and level of involvement with the properties. Many Marxist theorists have described the lumpenproletariat, which is made up of homeless and consistently unemployed people, who therefore do not fall into a particular class. It is important to note, however, that language and discussion around the lumpenproletariat is often aggressive and dismissive, whereas groups such as the Chinese Communist Party and the Black Panthers recognised their high revolutionary potential.

It is also important to note that wealth, while usually a signifier of one’s class, is not a concrete way of measuring someone’s position. A worker may win the lottery, and a business owner may become bankrupt, left only with their factory. While both have had enormous changes in wealth, they still remain in roles of exploitation and being exploited. It is important to note, however, that the wealth allows some degree of comfort to even a member of the working class, and may allow them to employ domestic workers of their own. Therefore, the Marxist understanding of class differs considerably to dominant ideas about 'class' in capitalist society, particularly in the context of the UK, where class is attached to purely financial and cultural associations.

What is class struggle?

Understanding, then, what is meant by private property, wage labour, and class, let us return to Marx’s statement which begins this article. Class is not a ‘natural’ division, but instead evolved due to the organisation of human social groups. As agriculture developed, land began to be held by certain families, while others had less, or none at all.

Of course, where one group exercises complete domination of another, the lower class will naturally attempt to rise up and seize control, as their interests are naturally opposed to the interests of the groups built upon their exploitation. The struggle of one or more classes against another is known as class struggle, and class struggle has been a key driving force of history. This is not a simple matter of working class vs ruling class, as often broad coalitions of classes have been built based on their shared material interests. Some of the earliest examples of this are the Servile Wars, in which enslaved and ‘free’ workers joined forces against the brutal plantation owners in Roman Italy. Another example is the Chinese Civil War, where the Communist Party of China built a coalition of workers, peasants, the petty bourgeoisie and the national bourgeoisie against international capitalism and Japanese imperialism.

Marxists understand that without class struggle, a social movement will win concessions and representation, but cannot liberate workers by and large. As the imperialist ruling classes increasingly diversify along lines of gender, sexuality, and race, it is important to note that the working classes of these oppressed groups will not see the supposed progress that these changes are meant to represent. Only the unity of workers, particularly those who are oppressed by heteropatriarchy, racism, colonialism, and imperialism, can truly liberate all oppressed peoples.

Suggested reading:

Karl Marx, Wage Labour and Capital

The next article in our Capitalism 101 series, ‘Race’ will explore the idea of ‘racial capitalism’ by looking at the intersectional nature of oppression in capitalist society.

Find the introduction to the series here and all the posts in the series here.