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SECTION 6.—THE THEORY OF COMPENSATION AS REGARDS THE WORKPEOPLE DISPLACED BY MACHINERY. - Karl Marx, Capital: A Critique of Political Economy. Volume I: The Process of Capitalist Production 
Capital: A Critique of Political Economy. Volume I: The Process of Capitalist Production, by Karl Marx. Trans. from the 3rd German edition, by Samuel Moore and Edward Aveling, ed. Federick Engels. Revised and amplified according to the 4th German ed. by Ernest Untermann (Chicago: Charles H. Kerr and Co., 1909).
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SECTION 6.—THE THEORY OF COMPENSATION AS REGARDS THE WORKPEOPLE DISPLACED BY MACHINERY.
James Mill, MacCulloch, Torrens, Senior, John Stuart Mill, and a whole series besides, of bourgeois political economists, insist that all machinery that displaces workmen, simultaneously and necessarily sets free an amount of capital adequate to employ the same identical workmen.132
Suppose a capitalist to employ 100 workmen, at £30 a year each, in a carpet factory. The variable capital annually laid out amounts, therefore, to £3000. Suppose, also, that he discharges 50 of his workmen, and employs the remaining 50 with machinery that costs him £1500. To simplify matters, we take no account of buildings, coal, 8c. Further suppose that the raw material annually consumed costs £3000, both before and after the change.133 Is any capital set free by this metamorphosis? Before the change, the total sum of £6000 consisted half of constant, and half of variable capital. After the change it consists of £4500 constant (£3000 raw material and £1500 machinery), and £1500 variable capital. The variable capital, instead of being one half, is only one quarter, of the total capital. Instead of being set free, a part of the capital is here locked up in such a way as to cease to be exchanged against labour-power: variable has been changed into constant capital. Other things remaining unchanged, the capital of £6000, can, in future, employ no more than 50 men. With each improvement in the machinery, it will employ fewer. If the newly introduced machinery had cost less than did the labour-power and implements displaced by it, if, for instance, instead of costing £1500, it had cost only £1000, a variable capital of £1000 would have been converted into constant capital, and locked up; and a capital of £500 would have been set free. The latter sum, supposing wages unchanged, would form a fund sufficient to employ about 16 out of the 50 men discharged; nay, less than 16, for, in order to be employed as capital, a part of this £500 must now become constant capital, thus leaving only the remainder to be laid out in labour-power.
But, suppose, besides, that the making of the new machinery affords employment to a greater number of mechanics, can that be called compensation to the carpet makers, thrown on the streets? At the best, its construction employs fewer men than its employment displaces. The sum of £1500 that formerly represented the wages of the discharged carpet-makers, now represents in the shape of machinery: (1) the value of the means of production used in the construction of that machinery, (2) the wages of the mechanics employed in its construction, and (3) the surplus-value falling to the share of their "master." Further, the machinery need not be renewed till it is worn out. Hence, in order to keep the increased number of mechanics in constant employment, one carpet manufacturer after another must displace workmen by machines.
As a matter of fact, the apologists do not mean this sort of setting free. They have in their minds the means of subsistence of the liberated workpeople. It cannot be denied, in the above instance, that the machinery not only liberates 50 men, thus placing them at others' disposal, but, at the same time, it withdraws from their consumption, and sets free, means of subsistence to the value of £1500. The simple fact, by no means a new one, that machinery cuts off the workmen from their means of subsistence is, therefore, in economical parlance tantamount to this, that machinery liberates means of subsistence for the workman, or converts those means into capital for his employment. The mode of expression, you see, is everything. Nominibus mollire licet mala.
This theory implies that the £1500 worth of means of subsistence was capital that was being expanded by the labour of the 50 men discharged. That, consequently, this capital falls out of employment so soon as they commence their forced holidays, and never rests till it has found a fresh investment, where it can again be productively consumed by these same 50 men. That sooner or later, therefore, the capital and the workmen must come together again, and that, then, the compensation is complete. That the sufferings of the workmen displaced by machinery are therefore as transient as are the riches of this world.
In relation to the discharged workmen, the £1500 worth of means of subsistence never was capital. What really confronted them as capital, was the sum of £1500, afterwards laid out in machinery. On looking closer it will be seen that this sum represented part of the carpets produced in a year by the 50 discharged men, which part they received as wages from their employer in money instead of in kind. With the carpets in the form of money, they bought means of subsistence to the value of £1500. These means, therefore, were to them, not capital, but commodities, and they, as regards these commodities, were not wage-labourers, but buyers. The circumstance that they were "freed" by the machinery, from the means of purchase, changed them from buyers into non-buyers. Hence a lessened demand for those commodities—voilà tout. If this diminution be not compensated by an increase from some other quarter, the market price of the commodities falls. If this state of things lasts for some time, and extends, there follows a discharge of workmen employed in the production of these commodities. Some of the capital that was previously devoted to production of necessary means of subsistence, has to become reproduced in another form. While prices fall, and capital is being displaced, the labourers employed in the production of necessary means of subsistence are in their turn "freed" from a part of their wages. Instead, therefore, of proving that, when machinery frees the workman from his means of subsistence, it simultaneously converts those means into capital for his further employment, our apologists, with their cut-and-dried law of supply and demand, prove, on the contrary, that machinery throws workmen on the streets not only in that branch of production in which it is introduced, but also in those branches in which it is not introduced.
The real facts, which are travestied by the optimism of economists, are as follows: The labourers, when driven out of the workshop by the machinery, are thrown upon the labour market, and there add to the number of workmen at the disposal of the capitalists. In Part VII. of this book it will be seen that this effect of machinery, which, as we have seen, is represented to be a compensation to the working class, is on the contrary a most frightful scourge. For the present I will only say this: The labourers that are thrown out of work in any branch of industry, can no doubt seek for employment in some other branch. If they find it, and thus renew the bond between them and the means of subsistence, this takes place only by the intermediary of a new and additional capital that is seeking investment; not at all by the intermediary of the capital that formerly employed them and was afterwards converted into machinery. And even should they find employment, what a poor look-out is theirs! Crippled as they are by division of labour, these poor devils are worth so little outside their old trade, that they cannot find admission into any industries, except a few of inferior kind, that are over-supplied with underpaid workmen.134 Further, every branch of industry attracts each year a new stream of men, who furnish a contingent from which to fill up vacancies, and to draw a supply for expansion. So soon as machinery sets free a part of the workmen employed in a given branch of industry, the reserve men are also diverted into new channels of employment, and become absorbed in other branches; meanwhile the original victims, during the period of transition, for the most part starve and perish.
It is an undoubted fact that machinery, as such, is not responsible for "setting free" the workman from the means of subsistence. It cheapens and increases production in that branch which it seizes on, and at first makes no change in the mass of the means of subsistence produced in other branches. Hence, after its introduction, the society possesses as much, if not more, of the necessaries of life than before, for the labourers thrown out of work; and that quite apart from the enormous share of the annual produce wasted by the non-workers. And this is the point relied on by our apologists! The contradictions and antagonisms inseparable from the capitalist employment of machinery, do not exist, they say, since they do not arise out of machinery, as such, but out of its capitalist employment! Since therefore machinery, considered alone, shortens the hours of labour, but, when in the service of capital, lengthens them; since in itself it lightens labour, but when employed by capital, heightens the intensity of labour; since in itself it is a victory of man over the forces of nature, but in the hands of capital, makes man the slave of those forces; since in itself it increases the wealth of the producers, but in the hands of capital, makes them paupers—for all these reasons and others besides, says the bourgeois economist without more ado, it is clear as noonday that all these contradictions are a mere semblance of the reality, and that, as a matter of fact, they have neither an actual nor a theoretical existence. Thus he saves himself from all further puzzling of the brain, and what is more, implicitly declares his opponent to be stupid enough to contend against, not the capitalistic employment of machinery, but machinery itself.
No doubt he is far from denying that temporary inconvenience may result from the capitalist use of machinery. But where is the medal without its reverse! Any employment of machinery, except by capital, is to him an impossibility. Exploitation of the workman by the machine is therefore, with him, identical with exploitation of the machine by the workman. Whoever, therefore, exposes the real state of things in the capitalistic employment of machinery, is against its employment in any way, and is an enemy of social progress!135 Exactly the reasoning of the celebrated Bill Sykes. "Gentlemen of the jury, no doubt the throat of this commercial traveller has been cut. But that is not my fault, it is the fault of the knife! Must we, for such a temporary inconvenience, abolish the use of the knife? Only consider! where would agriculture and trade be without the knife? Is it not as salutary in surgery, as it is knowing in anatomy? And in addition a willing help at the festive board? If you abolish the knife—you hurl us back into the depths of barbarism."136
Although machinery necessarily throws men out of work in those industries into which it is introduced, yet it may, notwithstanding this, bring about an increase of employment in other industries. This effect, however, has nothing in common with the so-called theory of compensation. Since every article produced by a machine is cheaper than a similar article produced by hand, we deduce the following infallible law: If the total quantity of the article produced by machinery, be equal to the total quantity of the article previously produced by a handicraft or by manufacture, and now made by machinery, then the total labour expended is diminished. The new labour spent on the instruments of labour, on the machinery, on the coal, and so on, must necessarily be less than the labour displaced by the use of the machinery; otherwise the product of the machine would be as dear, or dearer, than the product of the manual labour. But, as a matter of fact, the total quantity of the article produced by machinery with a diminished number of workmen, instead of remaining equal to, by far exceeds the total quantity of the hand-made article that has been displaced. Suppose that 400,000 yards of cloth have been produced on power-looms by fewer weavers than could weave 100,000 yards by hand. In the quadrupled product there lies four times as much raw material. Hence the production of raw material must be quadrupled. But as regards the instruments of labour, such as buildings, coal, machinery, and so on, it is different; the limit up to which the additional labour required for their production can increase, varies with the difference between the quantity of the machine-made article, and the quantity of the same article that the same number of workmen could make by hand.
Hence, as the use of machinery extends in a given industry, the immediate effect is to increase production in the other industries that furnish the first with means of production. How far employment is thereby found for an increased number of men, depends, given the length of the working-day and the intensity of labour, on the composition of the capital employed, i.e., on the ratio of its constant to its variable component. This ratio, in its turn, varies considerably with the extent to which machinery has already seized on, or is then seizing on, those trades. The number of the men condemned to work in coal and metal mines increased enormously owing to the progress of the English factory system; but during the last few decades this increase of number has been less rapid, owing to the use of new machinery in mining.137 A new type of workman springs into life along with the machine, namely, its maker. We have already learnt that machinery has possessed itself even of this branch of production on a scale that grows greater every day.138 As to raw material,139 there is not the least doubt that the rapid strides of cotton spinning, not only pushed on with tropical luxuriance the growth of cotton in the United States, and with it the African slave trade, but also made the breeding of slaves the chief business of the border slave-states. When, in 1790, the first census of slaves was taken in the United States, their number was 697,000; in 1861 it had nearly reached four millions. On the other hand, it is no less certain that the rise of the English woollen factories, together with the gradual conversion of arable land into sheep pasture, brought about the superfluity of agricultural labourers that led to their being driven in masses into the towns. Ireland, having during the last twenty years reduced its population by nearly one half, is at this moment undergoing the process of still further reducing the number of its inhabitants, so as exactly to suit the requirements of its landlords and of the English woollen manufacturers.
When machinery is applied to any of the preliminary or intermediate stages through which the subject of labour has to pass on its way to completion, there is an increased yield of material in those stages, and simultaneously an increased demand for labour in the handicrafts or manufactures supplied by the produce of the machines. Spinning by machinery, for example, supplied yarn so cheaply and so abundantly that the hand-loom weavers were, at first, about to work full time without increased outlay. Their earnings accordingly rose.140 Hence a flow of people into the cotton-weaving trade, till at length the 800,000 weavers, called into existence by the Jenny, the throstle and the mule, were overwhelmed by the power-loom. So also, owing to the abundance of clothing materials produced by machinery, the number of tailors, seamtresses and needle-women, went on increasing until the appearance of the sewing machine.
In proportion as machinery, with the aid of a relatively small number of workpeople, increases the mass of raw materials, intermediate products, instruments of labour, 8c., the working-up of these raw materials and intermediate products becomes split up into numberless branches; social production increases in diversity. The factory system carries the social division of labour immeasurably further than does manufacture, for it increases the productiveness of the industries it seizes upon, in a far higher degree.
The immediate result of machinery is to augment surplus-value and the mass of products in which surplus-value is embodied. And, as the substances consumed by the capitalists and their dependants become more plentiful, so too do these orders of society. Their growing wealth, and the relatively diminished number of workmen required to produce the necessaries of life beget, simultaneously with the rise of new and luxurious wants, the means of satisfying those wants. A larger portion of the produce of society is changed into surplus produce, and a larger part of the surplus produce is supplied for consumption in a multiplicity of refined shapes. In other words, the production of luxuries increases.141 The refined and varied forms of the products are also due to new relations with the markets of the world, relations that are created by Modern Industry. Not only are greater quantities of foreign articles of luxury exchanged for home products, but a greater mass of foreign raw materials, ingredients, and intermediate products, are used as means of production in the home industries. Owing to these relations with the markets of the world the demand for labour increases in the carrying trades, which split up into numerous varieties.142
The increase of the means of production and subsistence, accompanied by a relative diminution in the number of labourers, causes an increased demand for labour in making canals, docks, tunnels, bridges, and so on, works that can only bear fruit in the far future. Entirely new branches of production, creating new fields of labour, are also formed, as the direct result either of machinery or of the general industrial changes brought about by it. But the place occupied by these branches in the general production is, even in the most developed countries, far from important. The number of labourers that find employment in them is directly proportional to the demand, created by those industries, for the crudest form of manual labour. The chief industries of this kind are, at present, gas works, telegraphs, photography, steam navigation, and railways. According to the census of 1861 for England and Wales, we find in the gas industry (gasworks, production of mechanical apparatus, servants of the gas companies 8c.), 15,211 persons; in telegraphy, 2399; in photography, 2366; steam navigation, 3570; and in railways, 70,599, of whom the unskilled "navvies," more or less permanently employed, and the whole administrative and commercial staff, make up about 28,000. The total number of persons, therefore, employed in these five new industries amounts to 94,145.
Lastly, the extraordinary productiveness of modern industry, accompanied as it is by both a more extensive and a more intense exploitation of labour-power in all other spheres of production, allows of the unproductive employment of a larger and larger part of the working class, and the consequent reproduction, on a constantly extending scale, of the ancient domestic slaves under the name of a servant class, including men-servants, women-servants, lackeys, 8c. According to the census of 1861, the population of England and Wales was 20,066,244; of these, 9,776,259 males, and 10,289,965 female. If we deduct from this population all who are too old or too young for work, all unproductive women, young persons and children, the "ideological" classes, such as government officials, priests, lawyers, soldiers, 8c.; further, all who have no occupation but to consume the labour of others in the form of rent, interest, 8c.; and, lastly, paupers, vagabonds, and criminals, there remain in round numbers eight millions of the two sexes of every age, including in that number every capitalist who is in any way engaged in industry, commerce, or finance. Among these, 8 millions are:
All the persons employed in textile factories and in mines, taken together, number 1,208,442; those employed in textile factories and metal industries, taken together, number 1,039,605; in both cases less than the number of modern domestic slaves. What a splendid result of the capitalist exploitation of machinery!
[132.] Ricardo originally was also of this opinion, but afterwards expressly disclaimed it, with the scientific impartiality and love of truth characteristic of him. See l. c. ch. xxxi. "On Machinery."
[133.] Nota bene. My illustration is entirely on the lines of those given by the above named economists.
[134.] A disciple of Ricardo, in answer to the insipidities of J. B. Say, remarks on this point: "Where division of labour is well developed, the skill of the labourer is available only in that particular branch in which it has been acquired; he himself is a sort of machine. It does not therefore help matters one jot, to repeat in parrot fashion, that things have a tendency to find their level. On looking around us we cannot but see, that they are unable to find their level for a long time; and that when they do find it, the level is always lower than at the commencement of the process." ("An Inquiry into those Principles respecting the Nature of Demand," 8c. Lond. 1821, p. 72.)
[135.] MacCulloch, amongst others, is a past master in this pretentious cretinism. "If," he says, with the affected naïveté of a child of 8 years, "if it be advantageous, to develope the skill of the workman more and more, so that he is capable of producing, with the same or with a less quantity of labour, a constantly increasing quantity of commodities, it must also be advantageous, that he should avail himself of the help of such machinery as will assist him most effectively in the attainment of this result." (MacCulloch: "Princ. of Pol. Econ.," Lond. 1830, p. 166.)
[136.] "The inventor of the spinning machine has ruined India, a fact, however, that touches us but little." A. Thiers: De la propriété.—M. Thiers here confounds the spinning machine with the power-loom, "a fact, however, that touches us but little."
[137.] According to the census of 1861 (Vol. II., Lond., 1863), the number of people employed in coal mines in England and Wales, amounted to 246,613, of which 73,545 were under, and 173,067 were over 20 years. Of those under 20, 835 were between 5 and 10 years. 30,701 between 10 and 15 years. 42,010 between 15 and 19 years. The number employed in iron, copper, lead, tin, and other mines of every description, was 319,222.
[138.] In England and Wales, in 1861, there were employed in making machinery, 60,807 persons, including the masters and their clerks, 8c., as also all agents and business people connected with this industry, but excluding the makers of small machines, such as sewing machines, 8c., as also the makers of the operative parts of machines, such as spindles. The total number of civil engineers amounted to 3329.
[139.] Since iron is one of the most important raw materials, let me here state that, in 1861, there were in England and Wales 125,771 operative iron founders, of whom 123,430 were males, 2341 females. Of the former 30,810 were under, and 92,620 over 20 years.
[140.] "A family of four grown up persons, with two children as winders, earned at the end of the last, and the beginning of the present century, by ten hours' daily labour, £4 a week. If the work was very pressing, they could earn more...Before that they had always suffered from a deficient supply of yarn." (Gaskell, l. c., pp. 25-27.)
[141.] F. Engels in "Lage, 8c.," points out the miserable condition of a large number of those who work on these very articles of luxury. See also numerous instances in the "Reports of the Children's Employment Commission."
[142.] In 1861, in England and Wales, there were 94,665 sailors in the merchant service.