capitalist labour contract

capitalist labour contract

the exchange of wage-labour (in strict terms, labour-time or LABOUR-POWER) for wages between workers and capitalists. According to MARX, while formally free’ and apparently fair, when fully analysed this relationship is seen to be exploitive’. The reason for this is that the capitalist expropriates the SURPLUS VALUE generated by labour which remains once the wages required for the reproduction of labour have been paid. The capacity of capitalists to do this arises from:
  1. their ownership of the MEANS OF PRODUCTION;
  2. the existence of a RESERVE ARMY OF LABOUR, which together with the competition between capitalists, tends to depress wages towards the subsistence level;
  3. the greater capacity of capitalists than workers to withstand strikes and lockouts;
  4. the greater capacity of capitalists to enlist the support of the state.

It is clear that Marx's analysis under-estimated the power of trades unions and governments, as well as the competitive power of skilled labour, which historically in Western capitalist societies has raised wages well above subsistence levels. On the other hand, inequalities and a fundamental lack of symmetry in the market position and bargaining power in the relationship between capitalist and labour remain. Accordingly, many non-Marxist sociologists (e.g. GIDDENS, 1981), as well as Marxist sociologists, have continued to regard the asymmetry in the capitalist labour contract as a distinctive feature of the class structure of capitalist societies.

Collins Dictionary of Sociology, 3rd ed. © HarperCollins Publishers 2000