What did Marx mean by ‘abolish the wages system’?

  Morning Star
The exploitation inherent in the wage system was more obvious in Marx's time, but has essentially remained the same — and today it's far easier to imagine a world without wages entirely, where goods and services are free, explains the MARX MEMORIAL LIBRARY

A LETTER to the Morning Star early last year asked what “abolition of the wages system” (a phrase used by both Marx and Engels) might entail.

There are two questions here: how that abolition might be achieved and what a society that replaces it might look like. But before suggesting the answers, let’s first examine in more depth what the “wages system” is.

For Marx’s readers the answer would probably have been obvious — the “wages system” is another word for capitalism, a situation in which capitalists own the means of production (raw materials, machinery, factories, means of distribution and exchange), exploit the “labour power” of workers, extracting more from them in the way of work than the workers themselves receive in wages (their “surplus value”) and then sell the commodities they produce on a market, realising that value as a profit.

Today the answer would be a little more complicated. With the decline in manufacturing — in Britain at least — the process of extracting surplus value is often distanced from the manufacture of commodities. Facebook, for example, makes its profits by advertising goods and services that are produced by the labour of workers all over the world. Financialisation of the global economy has meant that the creation of profit is often based on what Marx called “fictitious capital,” distanced from the production of physical goods and services.

In parallel the nature of the “labour market” (how capitalists secure labour power) has changed. There has been a huge rise in genuine as well as bogus self-employment, in agency working, zero-hours contracts and in what used to be called “piece-work” — no longer so much in the production of physical products, but (for example) in sales and delivery work. Wage differentials have increased enormously as has the division of wealth in our society.

And, despite four decades of vicious attacks on public services, the “social wage” — including education and (as the Covid-19 pandemic has brought home to anyone who was unsure of it) the NHS and other welfare provision — is still vitally important to the lives of everyone.

But the fundamental nature of exploitation remains the same as in Marx’s day. Today, as then, “the wages system” is a kind of shorthand for the often complicated processes whereby surplus value is extracted from ordinary people.

Its abolition — ending exploitation — will involve democratic popular control of what Marxists call the “means of production, distribution and exchange.” Marx and Engels continually asserted that piecemeal reforms could never achieve the transformation to a non-exploitative society and that slogans such as “a fair day’s pay for a fair day’s work” were actually counterproductive because they tacitly accepted the inherently exploitative nature of capitalism.

History seems to have borne out that prediction, particularly in Britain under successive governments, both Labour and Conservative.

In a speech to the International Working Men’s Association, June 1865 (later published as a pamphlet, Value, Price and Profit) Marx declared “Workers ought not to be exclusively absorbed in these unavoidable guerilla fights incessantly springing up from the never ceasing encroachments of capital or changes of the market. […] Instead of the conservative motto, ‘A fair day’s wage for a fair day’s work!’ they ought to inscribe on their banner the revolutionary watchword, ‘Abolition of the wages system!’”

So the slogan “abolish the wages system” was advanced in opposition to those who (like most social reformers today) argue for modest changes to the existing system to reduce inequality. It is a challenge to the idea that it is somehow possible to retain a capitalist mode of production and superimpose on it socialist policies of distribution.

Incidentally, the slogan was also advanced against those who thought (as some do today) that capitalism would disappear of its own accord or that it could be transformed by appeals to common sense or by proposals for utopian schemes including those based on earlier forms of commodity exchange such as barter.

Capitalism, inherently exploitative and oppressive, had to be ended.

Limited advances are possible within capitalism. In the decades immediately after the second world war a strong labour and trades union movement was able to secure a huge growth in the “social wage,” particularly in health and welfare services and in education.

Today much of that has been reversed, through privatisation and outsourcing as well as direct cuts. The full impact has yet to be felt as the economic consequences have been hidden through the selling off of public assets, particularly land, housing and transport and other infrastructure.

Labour’s 2019 manifesto was far from a fully socialist programme. In many ways it would have of itself secured little more than a partial return to what used to be called the “mixed economy” which the organised left had managed to secure in the three decades after 1945.

But — had Labour been elected — it would have been an important first step in the advance to socialism in Britain, bitterly resisted by those whose interests it threatened and therefore requiring further measures — particularly in relation to financial capital — if the benefits of people’s labour were to accrue to society as a whole rather than to “the few” who currently control our lives.

Ironically, some of the manifesto’s proposals — unthinkable before the Covid-19 pandemic hit — have become “the new norm” at least during this crisis. Other elements of the manifesto — such as the provision of free broadband — could have become part of a programme of provision of universal basic services which would have improved life for “the many” and contributed to the reduction of inequality, although they would not have altered the fundamentally exploitative nature of capitalism.

Luxembourg (for example) has recently, along with around 100 towns and cities worldwide, made its public transport system free to everyone. But the wages system still exists; many of the transport networks are operated by private, profit-making companies and the system is subsidised from taxation — in the last analysis a charge on the value produced by working people. However — like the NHS in Britain — it provides a glimpse of what might be possible within a truly socialist economic system.

As earlier answers have emphasised, a socialist solution to the crisis of capitalism will require struggle — inside and outside Parliament, in which trades unions, community organisations, environmental and other campaigning groups, as well as socialist political organisations — including the Labour Party — will all be central.

During that transition to socialism, money — and wages — will continue to exist, but within socialism the “wages system” as understood by Marx and Marxists would be progressively transformed.

A (socialist) principle of “from each according to their ability, to each according to their work done” would be accompanied by a programme of free universal basic services, restoring the NHS to full health, a properly resourced programme of adult social care, accompanied by a National Education Service giving everyone an entitlement to high quality education up to the age of 18, free early years childcare and school meals for primary children and an expanded programme of further and adult education with skills and vocational qualifications valued the same as university degrees.

A programme of universal basic services would also cover other essential needs — housing, transport and access to digital information.

Over time the wages system would be replaced by the communist principle of “from each according to their ability, to each according to their needs.” This will not necessarily be through state ownership or control — though that will be vital for key sectors of the economy, particularly in utilities and energy supply.

It would also be achieved also through a host of non-exploitative ownership models, including social enterprises and co-operatives and well as small businesses and independent traders. Ultimately, argued Marx, the need for money would disappear altogether.

Though history has taught us that this may be a great deal further off than we may have thought, the Covid-19 pandemic has shown that common humanity — and the preparedness to work for the sake of the benefits this will provide to others, rather than solely for a wage — is widespread in our society.

And that is the best evidence that the abolition of the wages system is a potentially achievable goal.

On Thursday, July 23 at 7pm Professor Keith Ewing, president of the Institute of Employment Rights is delivering the Marx Memorial Library and Workers’ School online lecture: “Covid-19 and Workers’ Rights: building a progressive future.” Details and registration on www.marx-memorial-library.org.uk/event/273.

Previous “Full Marx” answers (this is number 67) can be found at https://www.marx-memorial-library.org.uk/education/full-marx.