Greatest Robbery in History - The Exploitation of Wage-Labor

Greatest Robbery in History
The Exploitation of Wage-Labor
This is an OCR scan a four-page leaflet
that was distributed in the 1960s by
the Socialist Labor Party of America.
A future revision of this file will
include the several illustrations that
were provided in the original.


The Exploitation of Wage-Labor

This is the story of a robbery so colossal that it defies measurement. Compared with it the prizes, loot and spoils taken by all the pirates, buccaneers and freebooters of history are a mere bagatelle. The robbery is confined neither by time nor space. It is continous, unremitting. It proceeds wherever society is divided into classes, wherever one class owns the instruments of production to which another class, owning no tools of its own, must have access in order to live.

There is nothing illegal about this robbery. Under the capitalist system, it is considered the normal "way of life." But it is robbery nonetheless. For the capitalist class uses its ownership and control of the factories, land, railroads, etc., in the same way that a highwayman uses his gun -- to extract a tribute from its victims.


It is an insidious form of robbery, this capitalist exploitation. It abounds in illusions. For example, there is the illusion that conceals the real source of wages and makes the capitalist exploiter appear to be a sort of benign philanthropist. The worker goes into the factory on Monday morning empty handed, but, when he comes out on pay day, lo and behold, he has a pay check in his hands! If he meets a Socialist and hears the Socialist attack the capitalist system, he might say:

"Don't attack my boss. I'm getting little enough as it is. I wouldn't get anything if he were put out of business."

You see, this worker labors under the illusion that the capitalist supports him, whereas, as we shall demonstrate, he supports the capitalist. In this respect he is like the farmer who has not yet learned that you can raise potatoes without potato bugs.


Why is the worker the victim of this illusion? What goes on inside the factory that conceals from him the true state of affairs? What goes on is simply this: In the first hour or two that he is on the job the worker produces in the form of new values as much as he is paid in wages for the entire working day!

Of course the worker has no way of knowing this. When the serf of feudal times was forced to yield part of what he produced to the feudal lord, he knew he was being robbed. But capitalist robbery ia more subtle. The worker may perform but one minute operation in the production of a commodity requiring thousands of operations. Nevertheless, his labor has created new value equal to his day's wages in the first hour or two on the job. and this new value -- together with the value added by his fellow workers -- is embodied in the finished product.


Karl Marx, the great champion of the working class, gave a name to the part of the working day in which the worker reproduces his wages. He called it necessary labor time. During the rest of the working day the worker produces values for which he is not paid, or -- let us call a spade a spade -- values of which he is robbed! This part of the working day Marx called surplus labor time.

For purposes of simplification, take the case of a worker who sells his labor power -- to be expended in eight hours -- for the price of $15. The first two hours of his working day are necessary labor time. In these two hours he produces as much as the boss pays him for eight hours of labor.

During the remaining six hours -- surplus labor time -- he produces three times as much, or $45 worth of new values. In the science of political economy we call the wealth that the worker produces, but of which he is robbed, surplus value.


What in the degree of robbery, or exploitation? It varies as conditions vary in the different countries. In a countrv where more advanced techniques and methods of production are applied (such as the United States), the degree of exploitation ia greater than it is in less advanced countries. At first blush this may seem contradictory. Why, you may ask, should workers who are more productive receive less proportionately of what they produce than workers who are not so productive?

The answer is simply that wages are not determined by what the worker produces. Leaving aside their temporary rise and fall due to fluctuations of supply and demand in the labor market, wages are determined by what it costs the worker to live and raise a new crop of wage slaves to take his place when he dies or is thrown on the scrap heap.

Everyone is familiar with the expression a "living wage." Our grandfathers got a "living wage"; our fathers got a "living wage": and. normally, we get a "living wage." Thus, in terms of food, clothing, shelter, etc., we receive substantially what our grandfathers did. Yet we produce vastly more than our grandfathers and considerably more than our fathers. Why, then, haven't we advanced beyond the "living wage" concept? The answer is that we cannot advance beyond this concept, no matter how much our productivity increases, as long as capitalism lasts. And the reason is that, under capitalism, labor power is a commodity, an article of merchandise, whose price is governed by the same economic laws that govern the price of any other commodity.


Price may fluctuate according to the supply of a commodity and the demand for it in the market. Just as a pendulum swings back and forth, but is always drawn toward the center by gravitation, price may go up or down -- but always it oscillates around its value in accord with the economic law of value.

In other words, price, in the long run, coincides with value. And the value of any commodity is determined by the amount of socially necessary labor time required to produce it. In the case of the commodity labor power this means that its value is determined by the amount of socially necessary labor time required to produce the food, clothing, shelter, etc., needed to keep the worker in working condition. He gets a 'living wage."


But, note this: The more highly developed a nation is industrially, the less labor time is required to produce the workers' necessities. Hence, instead of the workers' share of their product increasing proportionately as their productivity rises, it is the other way around. As new methods and techniques -- such as automation -- are introduced, the articles workers consume are cheapened and wages fall accordingly. Thus the workers' relative wages (what they receive in relation to what they produce) tend to fall as productivity rises. In other words, as labor productivity rises, the necessary labor time grows shorter, thus lengthening that part of the working day when the worker produces surplus value.

How the Capitalists Divide the Loot For purposes of simplification we have used a single worker as an example. Actually, as Daniel De Leon, the great American Marxist, pointed out, exploitation "is not the act of any individual capitalist, or set of capitalists, perpetrated upon any indivMnal workingman or set of workingmen. Exploitation is a class act -- the act of the whole capitalist class-perpetrated upon a class -- the whole working class."

Apologists for capitalism sometimes try to refute Socialist charges of high-degree exploitation in America by pointing to the net profits of corporations. But Socialists have never contended that the corporations pocket all the surplus value their workers produce. On the contrary, Socialists point out that before a capitalist can count his net profits he must pay off the landlord, tax collector, banker, advertising capitalist, insurance company, and all the other parasites on parasites. By the time taxes, interest, rent, etc., are deducted, net profits of the immediate capitalist exploiter may be only a fraction of the surplus value of which workers are robbed. But this in no way disputes the fact that the working class is robbed by the capitalist class of wealth so vast that it defies measurement.


Now, let us examine this thievery from another angle. We measure surplus value in dollars. But the workers do not produce dollars, they produce commodities -- and a commodity, Marx tells us, is an article that will satisfy some human want and that is produced for sale. Hence, before the capitalists can enjov their plunder, they must first find buyers for it. If they don't get rid of their commodity loot, it accumulates hi the warehouses and production stagnates.

In wartime the solution is simple. In wartime the surplus steel goes into tanks, ships and guns. the surplus textiles into uniforms, tents and bandages, the surplus lumber into training camps, barracks and caskets, and so on down the line of commodities.

But between capitalist wars -- in the intervening periods of "peace" -- the capitalists do not have this ready outlet for their wares. In peacetime they must find other means of disposing of their loot. How do they do it?

First of all, it is self-evident that the workers do not consume more than they can buy with their wages. And, as we have shown, this is just a fraction of what they produce. What happens to the remainder of labor's vast product?

A part is consumed by the capitalists in prodigal living. Some capitalists -- the plutocracy -- live in opulence surpassing that of kings, and often maintain not one palace, but many. In every city the capitalists form a community of super-consumers. They are the patrons of the night clubs, the purchasers of costly luxuries, the members of expensive clubs. Yet. despite their prodigality, the capitalists can use up in personal consumption only a fraction of the immense wealth created by labor and appropriated by their exploiters.

Another part of this wealth -- a much larger part -- is used up in running a huge, bureaucratic, capitalist political State. The cost of running the political State -- including city, county, state and federal governments -- was somewhat more than $20 billion in 1939. Today the cost of running the federal government alone runs to more than $65 billion.

Still another part of labor's surplus product goes into expansion of industry. But while this tends temporarily to relieve the glut, its ultimate effect is to increase the capacity to produce commodities, hence to produce surpluses.


Waste is another outlet for the wealth labor produces but cannot buy back. Some of the waste is incidental to the operation of capitalism. Take real estate transactions, for example. From the standpoint of economy these are pure waste. So is insurance. And advertising. None of these activities creates a penny's worth of value. Then there is the wanton destruction of surplus crops, and the fantastic waste involved in building hydrogen bombs and other weapons. And the waste of economic anarchy and duplication of effort.

Indeed, capitalism thrives best when waste is greatest. Floods, tornadoes, droughts, hurricanes and other natural disasters may ruin individual capitalists, but they are a veritable tonic to the capitalist system, for they help to use up surpluses.


However, such is the tremendous productivity of the modern working class that, despite prodigious consumption and waste, surpluses tend to accumulate, glutting the home market. The only outlet for this surplus is -- the world market.

Foreign markets are to capitalism what a safety valve is to a steam boiler. Continue to pump steam into a steam boiler that has no safety valve to release the excess pressure and, sooner or later, something will break. Similarly with capitalist production. Under a system of production for sale and profit, the foreign markets must drain off the surplus or it will pile up, cause economic stagnation at home, and, ultimately result in capitalist collapse.

All industrial countries, Communist as well as capitalist, are competing for a world market that, instead of growing larger, tends to shrink as economically backward countries industrialize and establish their own systems of exploitation. Inevitably the rivals in this economic war encroach upon each other's markets and sources of raw materials, creating international friction and hatred. For a time the weapons of trade -- tariffs, barter deals, import quotas, etc. -- are invoked. But ultimately such weapons are inadequate. The struggle that begins in commerce ends in -- WAR!


Capitalist rulers have no ears for the voice of Socialist sanity. For Socialism -- not the phony "Socialism" of Soviet Russia, which is really a system of bureaucratic despotism, but real Socialism -- would not only put an end to the periodic wars for capitalist survival -- it would also put an end to capitalist robbery of the working class. By raising the worker out of his commodity status to that of a free human being with a voice and vote in the administration of industry, by guaranteeing to every producer the full social value of the product, in abort, by replacing capitalist anarchy and exploitation with Socialist cooperation and harmony, the world could be made into a veritable paradise of peace and plenty.

But capitalist rulers, blinded by their class and material interests, reject this. Whatever betides, they choose capitalism with its inevitable struggle for world trade and raw material sources, with its inevitable war. Not even the hydrogen bomb with its threat of human annihilation can prevent this ultimate outcome if capitalism is allowed to remain the ruling principle of society.

What the capitalist rulers and Communist bureaucrats are incapable of learning, the toilers of the world must learn --

There can be no peace without Socialism!




The capitalist system is the first in which a surplus of useful things is looked upon, not as a blessing, but as a curse. Below are depicted the various methods whereby the capitalists dispose of the fantastic volume of commodities the modern wage-slave class produces. It is impossible, of course, to determine accurately the proportion of labor's product used up in waste, or through expenive living by the capitalists, or in other ways, and the drawing is intended to convey this only in general terms. It should also be noted that the workers are many, the capitalists few,, and, though the working class may consume more in living, its per capita consumption is but a fraction of that of its exploiters. than one and one-half per cent of all families had incomes of $15,000 and over. More than 8,300,000 families received under $2,000. Another 5,000,000 got from $2,000 to $3,000. At least half the U.S. population is near the ragged edge.




The capitalist class, as a class, robs the working class, as a class. The individual capitalist exploiter does not pocket the whole loot taken from the workers. Out of the wealth the workers produce come rent, interest, fees for insurance, advertising, etc., taxes and the "pay-off" for corrupt politicians, criminals and other hangers-on of capitalism who in one way or another serve capitalist interests. When workers read of the net profits of corporations, small or large, they should always bear in mind that these represent only a fraction of the total plunder. The "pie" above is suggestive and does not pretend to convey the real proportions in which labor's product is divided.