The supporters of the capitalist mode of production pretend that salary is payment for labor, and surplus value the product of capital.

But what is labor value? Labor, either still in the worker, or already out; that is to say, labor, either the force, the power to do something, or the thing itself already done: in short, labor, either labor power, or the commodity. The worker cannot sell labor that’s already left him, ie the thing he produces, the commodity, because this belongs to the capitalist, and not to him. Because the worker could sell labor that’s already left him, ie the commodity he produced, he would need to possess the means of production and raw materials, and so he would be the merchant of the commodities he produced. But he doesn’t possess anything, he is a proletarian, who, to live, must sell to others the only good that rests in him, that is his power or force to work, labor power. The capitalist therefore can buy nothing besides labor power; which, like all other commodities, has a use value and an exchange value. The capitalist pays the appropriately determined value, i.e. the exchange value, to the worker for the commodity, which he sells. But labor power also has a use value, which belongs to the capitalist who bought it. Now, the use value of this singular commodity has a double quality. The first is that which it has in common with the use value of all other commodities, that is, of satisfying a need; the second is that, completely special to it, of creating value, which distinguishes this commodity from all the others.

Therefore, salary cannot represent the price of labor power. And surplus value cannot be produced by capital, because capital is inert matter, which is always found to have the same amount of value as it did when it was used in the commodity; it is matter that hasn’t any life, and that, remaining by itself, without labor power, would never be able to have it. It is only labor power that is able to produce surplus value. It is this that gives the first seed of life to capital. It is this that supports the whole life of capital. This, more than anything, first sucks, then absorbs with all of its pores, and finally vigorously pumps surplus value from labor.

The two main forms of salary are: time-wages and piece-wages.

Time-wages are those paid for a given time; like for a day, for a week, for a month, etc, of labor. It is simply a transformation of the price of labor power. Instead of saying that the worker has sold his labor power of one day for 3 lire, one says that the worker goes to work for a salary of 3 lire a day.

The salary of 3 lire per day is therefore the price of labor power for a day. But this day can be more or less long. If, for example, a day of 10 hours of labor power is paid 30 cents per hour, then, if it’s 12 hours, labor power is paid 25 cents per hour. Therefore, the capitalist, extending the workday, pays the worker a smaller price for his labor power. The capitalist can also increase salary, while continuing to pay the worker, for his labor power, the same price as before, and even less. If a capitalist increases his worker’s salary from 3 lire to ₤3,60 a day, and at the same time he prolongs the workday from the 10 hours that it was before to 12 hours, he, by increasing daily wages by ₤0,60, will always come out paying the worker ₤0,30 an hour for his labor power. If then the capitalist increases the salary from ₤3 to ₤3,60, but, at the same time, prolongs the day from 10 to 15 hours, he, by increasing the daily wages, will be able to pay the worker less than before for his labor power, ie 24 cents instead of 30 cents an hour. The capitalist obtains the same effect, if, instead of increasing the length of labor, he increases it in volume; as we have already seen he was able to do with machinery. In conclusion, the capitalist, increasing labor, is able to cheat the worker honestly; and he can do it while gaining fame for his generosity, with the increase of his daily wages.

When the capitalist pays the worker by the hour, he still finds means of damaging him, increasing or decreasing labor, but always honestly paying the same price for every hour of labor. Indeed, the salary is 25 cents for an hour of labor. If the capitalist makes the worker labor for 8 hours, instead of 12, he will pay him ₤2, instead of ₤3; he will be losing, that is, one lira, with which the worker must satisfy the third part of his daily needs. Inversely, if the capitalist makes the worker labor for 14 or 16 hours, instead of 12, while paying him ₤3,50 or ₤4 instead of ₤3, he ends up taking 2 or 4 hours of labor from the worker at a smaller price than it’s worth. After 12 hours of labor the worker’s powers have already suffered consumption; and the other 2 or 4 hours of labor, overtime, cost more than the first 12 hours. This rationale, presented by the workers, in fact seems to be accepted by different industries, where they pay a greater price for overtime done after the established hours of the workday.

The smaller the price of labor power, represented by time-wages, the longer the labor time. And that is clear. If the salary is ₤0,25 per hour, instead of ₤0,30, the worker must work a 12-hour day, instead of working a 10-hour day, to procure the ₤3 required for their daily needs. If the salary is ₤2 a day, the worker must work three days, instead of two, to procure how much he needs for only two days. Here the lessening of salary increases labor; but it also happens that the increase of labor makes salary lower. With the introduction of machinery, for example, a worker comes to produce double than before; so the capitalist lessens the number of workers; as a consequence the request for work grows, and salaries fall.

Piece-wages are nothing but a transformation of time-wages; as shown by the fact that these two forms of salary are used indifferently, not only in different industries, but at times even in the same industry.

A worker labors 12 hours a day for a salary of ₤3 and produces a value of ₤6. Here it is irrelevant to say that the worker produces, in the first 6 hours of his labor, the ₤3 of his salary, and, in the other 6 hours, the ₤3 of surplus value; it’s equivalent to saying that the worker produces, in every first half-hour, ₤0,25, a twelfth of his salary, and, in every second half-hour, ₤0,25, a twelfth of the surplus value. In the same way, if the worker produces, in 12 hours of work, 24 items, and receives 12,5 cents per item, in total ₤3, it’s exactly like saying that the worker produces 12 items to reproduce the ₤3 given to him in payment, and 12 items to produce ₤3 of surplus value; or that the worker produces, in every hour of work, and item for his payment, and an item for his boss’s gain.

In piece-wages:

“The quality of the labor is here controlled by the work itself, which must be of average perfection if the piece-price is to be paid in full. Piece wages become, from this point of view, the most fruitful source of reductions of wages and capitalistic cheating.

“They furnish to the capitalist an exact measure for the intensity of labor. Only the working-time which is embodied in a quantum of commodities determined beforehand, and experimentally fixed, counts as socially necessary working-time, and is paid as such. In the larger workshops of the London tailors, therefore, a certain piece of work, a waistcoat, e.g., is called an hour, or half an hour, the hour at 6d. By practice it is known how much is the average product of one hour. With new fashions, repairs, &c., a contest arises between master and laborer as to whether a particular piece of work is one hour, and so on, until here also experience decides. Similarly in the London furniture workshops, &c. If the laborer does not possess the average capacity, if he cannot in consequence supply a certain minimum of work per day, he is dismissed.

“Since the quality and intensity of the work are here controlled by the form of wage itself, superintendence of labor becomes in great part superfluous. Piece wages therefore lay the foundation of the modern “domestic labor,” described above, as well as of a hierarchically organized system of exploitation and oppression. The latter has two fundamental forms. On the one hand, piece wages facilitate the interposition of parasites between the capitalist and the wage-laborer, the “sub-letting of labor.” The gain of these middlemen comes entirely from the difference between the labor-price which the capitalist pays, and the part of that price which they actually allow to reach the laborer. In England this system is characteristically called the “sweating system.” On the other hand, piece-wage allows the capitalist to make a contract for so much per piece with the head laborer — in manufactures with the chief of some group, in mines with the extractor of the coal, in the factory with the actual machine-worker — at a price for which the head laborer himself undertakes the enlisting and payment of his assistant work people. The exploitation of the laborer by capital is here effected through the exploitation of the laborer by the laborer.

“Given piece-wage, it is naturally the personal interest of the laborer to strain his labor-power as intensely as possible; this enables the capitalist to raise more easily the normal degree of intensity of labor. It is moreover now the personal interest of the laborer to lengthen the working-day, since with it his daily or weekly wages rise. This gradually brings on a reaction like that already described in time-wages, without reckoning that the prolongation of the working-day, even if the piece wage remains constant, includes of necessity a fall in the price of the labor” (Marx, Capital, vol. 1, ch. 21).

Piece-wages are one of two principle supports of the above-mentioned system, that is of paying the worker by the hour, without the boss’s commitment to occupy the worker regularly during the day or the week.

“In the workshops under the Factory Acts, piece wages become the general rule, because capital can there only increase the efficacy of the working-day by intensifying labor” (Marx, Capital, vol.1, ch. 21).

The increase in production is followed by the proportional decrease in salary. When the worker was producing 12 items in 12 hours, the capitalist used to pay him, for example, a salary of ₤0,25 per item. With the production doubled, the worker produces 24 items, instead of 12, and the capitalist lowers wages by half, i.e., to 12,5 cents per item.

“This change in piece-wage, so far purely nominal, leads to constant battles between capitalist and labor. Either because the capitalist uses it as a pretext for actually lowering the price of labor, or because increased productive power of labor is accompanied by an increased intensity of the same. Or because the laborer takes seriously the appearance of piece wages (viz., that his product is paid for, and not his labor-power) and therefore revolts against a lowering of wages, unaccompanied by a lowering in the selling price of the commodity …

“The capitalist rightly knocks on the head such pretensions as gross errors as to the nature of wage-labor. He cries out against this usurping attempt to lay taxes on the advance of industry, and declares roundly that the productiveness of labor does not concern the laborer at all” (Marx, Capital, vol. 1, ch. 21).