Wages, Price, and Profit

The following article is from The Great Soviet Encyclopedia (1979). It might be outdated or ideologically biased.

Wages, Price, and Profit


a paper written by K. Marx; a report read by Marx on June 20 and 27, 1865, at meetings of the General Council of the International Workingmen’s Association (First International). The paper was prepared in response to the address of J. Weston (a member of the General Council and a follower of R. Owen), who had stated that the proletariat’s struggle for increased wages was useless and that trade unions were harmful. Marx revealed the groundlessness and theoretical erroneousness of such a position. In so doing, he summarized in a concise and popular form many positions that he subsequently developed in Das Kapital. Marx’ work was published in English for the first time as a separate brochure (1898, London); in the same year it was published in German in the journal Neue Zeit and in Russian in the journal Zhiin. (It has been included in the first part of the 13th volume of the Collected Works of K. Marx and F. Engels in Russian and in the 16th volume of the second edition of the Collected Works .)

In his paper, Marx profoundly analyzed theoretical issues of political economy in their integral connection with the practical problems of the proletariat’s class struggle. He refuted Weston’s assertions that the value of commodities is determined by wages, that profit and rent are rated increases of such value, and that each wage increase supposedly entails an automatic rise in prices. Marx contrasted Weston’s erroneous views with the scientific theory of value, analyzing the factors that determine labor productivity and, correspondingly, commodity value. He briefly summarized the theory of the primary accumulation of capital, the value of labor power, and the generation of surplus value and its division into profit, rent, and interest. Marx defined the role and significance of the economic and political struggle of the proletariat under conditions of capitalism. He scientifically validated the goals and tasks of the class trade-union movement of the proletariat and the strategy and tactics of its economic struggle. He decisively opposed the passivity and meekness of proletarians in relation to the exploiting class of capitalists, stating that if workers did not offer resistance to the thirsting of capital for maximum profit they risked being turned into a solid mass of degraded poor.

In addition, Marx emphasized that the workers’ struggle for increased wages was inseparably linked to the system of hired labor and was aimed in most cases at maintaining the existing value of labor power. The necessity of struggling against the capitalists for the “price of labor” is basic to the condition of the workers, which compels them to sell their laboring power. Marx warned the workers against exaggerating the results of their daily economic struggle, since in this struggle the working class combats only the effects, and not the causes, of their condition. Thus the proletariat only delays the worsening of its position, but it does not alter its course; it applies palliatives but does not cure the disease. “They ought,” Marx said, “therefore, not to be exclusively absorbed in these unavoidable guerrilla fights incessantly springing up from the never-ceasing encroachments of capital or changes of the market. They ought to understand that, with all the miseries that it imposes upon them, the present system simultaneously engenders the material conditions and the social forms necessary for an economic reconstruction of society” (K. Marx and F. Engels, Soch. , 2nd ed., vol. 16, p. 154). Thus, the economic struggle of the proletariat must be combined with a political one. Instead of the conservative slogan “A fair day’s wage for a fair day’s work!” Marx proposed the slogan “Abolition of the wage system!” (ibid. , pp. 154-55).

Marx’ “Wages, Price, and Profit” is also timely in today’s conditions as a theoretical weapon in the struggle against the bourgeoisie. The views of vulgar political economy that Weston defended are also advocated by contemporary bourgeois economists, enemies of the revolutionary struggle of the proletariat; for example, the modern theory of the “vicious circle” or “spiral” of wages and prices. This theory is designed to justify a policy of “freezing” wages in conditions of the colossal growth of monopoly profits, inflation, and the running up of prices as a basic method of reducing the real wages of the workers.


The Great Soviet Encyclopedia, 3rd Edition (1970-1979). © 2010 The Gale Group, Inc. All rights reserved.