The Capitalist System

Is it necessary to repeat here the irrefutable arguments of Socialism which no bourgeois economist has yet succeeded in disproving? What is property, what is capital in their present form? For the capitalist and the property owner they mean the power and the right, guaranteed by the State, to live without working. And since neither property nor capital produces anything when not fertilized by labor — that means the power and the right to live by exploiting the work of someone else, the right to exploit the work of those who possess neither property nor capital and who thus are forced to sell their productive power to the lucky owners of both. Note that I have left out of account altogether the following question: In what way did property and capital ever fall into the hands of their present owners? This is a question which, when envisaged from the points of view of history, logic, and justice, cannot be answered in any other way but one which would serve as an indictment against the present owners. I shall therefore confine myself here to the statement that property owners and capitalists, inasmuch as they live not by their own productive labor but by getting land rent, house rent, interest upon their capital, or by speculation on land, buildings, and capital, or by the commercial and industrial exploitation of the manual labor of the proletariat, all live at the expense of the proletariat. (Speculation and exploitation no doubt also constitute a sort of labor, but altogether nonproductive labor.)

I know only too well that this mode of life is highly esteemed in all civilized countries, that it is expressly and tenderly protected by all the States, and that the States, religions, and all the juridical laws, both criminal and civil, and all the political governments, monarchies and republican — with their immense judicial and police apparatuses and their standing armies — have no other mission but to consecrate and protect such practices. In the presence of these powerful and respectable authorities I cannot even permit myself to ask whether this mode of life is legitimate from the point of view of human justice, liberty, human equality, and fraternity. I simply ask myself: Under such conditions, are fraternity and equality possible between the exploiter and the exploited, are justice and freedom possible for the exploited?

Let us even suppose, as it is being maintained by the bourgeois economists and with them all the lawyers, all the worshipers and believers in the juridical right, all the priests of the civil and criminal code — let us suppose that this economic relationship between the exploiter and the exploited is altogether legitimate, that it is the inevitable consequence, the product of an eternal, indestructible social law, yet still it will always be true that exploitation precludes brotherhood and equality. It goes without saying that it precludes economic equality. Suppose I am your worker and you are my employer. If I offer my labor at the lowest price, if I consent to have you live off my labor, it is certainly not because of devotion or brotherly love for you. And no bourgeois economist would dare to say that it was, however idyllic and naive their reasoning becomes when they begin to speak about reciprocal affections and mutual relations which should exist between employers and employes. No, I do it because my family and I would starve to death if I did not work for an employer. Thus I am forced to sell you my labor at the lowest possible price, and I am forced to do it by the threat of hunger.

But — the economists tell us — the property owners, the capitalists, the employers, are likewise forced to seek out and purchase the labor of the proletariat. Yes, it is true, they are forced to do it, but not in the same measure. Had there been equality between those who offer their labor and those who purchase it, between the necessity of selling one’s labor and the necessity of buying it, the slavery and misery of the proletariat would not exist. But then there would be neither capitalists, nor property owners, nor the proletariat, nor rich, nor poor: there would only be workers. It is precisely because such equality does not exist that we have and are bound to have exploiters.

This equality does not exist because in modern society where wealth is produced by the intervention of capital paying wages to labor, the growth of the population outstrips the growth of production, which results in the supply of labor necessarily surpassing the demand and leading to a relative sinking of the level of wages. Production thus constituted, monopolized, exploited by bourgeois capital, is pushed on the one hand by the mutual competition of the capitalists to concentrate evermore in the hands of an ever diminishing number of powerful capitalists, or in the hands of joint-stock companies which, owing to the merging of their capital, are more powerful than the biggest isolated capitalists. (And the small and medium-sized capitalists, not being able to produce at the same price as the big capitalists, naturally succumb in the deadly struggle.) On the other hand, all enterprises are forced by the same competition to sell their products at the lowest possible price. It [capitalist monopoly] can attain this two-fold result only by forcing out an ever-growing number of small or medium-sized capitalists, speculators, merchants, or industrialists, from the world of exploiters into the world of the exploited proletariat, and at the same time squeezing out ever greater savings from the wages of the same proletariat.

On the other hand, the mass of the proletariat, growing as a result of the general increase of the population — which, as we know, not even poverty can stop effectively — and through the increasing proletarianization of the petty-bourgeoisie, ex-owners, capitalists, merchants, and industrialists — growing, as I have said, at a much more rapid rate than the productive capacities of an economy that is exploited by bourgeois capital — this growing mass of the proletariat is placed in a condition wherein the workers are forced into disastrous competition against one another.

For since they possess no other means of existence but their own manual labor, they are driven, by the fear of seeing themselves replaced by others, to sell it at the lowest price. This tendency of the workers, or rather the necessity to which they are condemned by their own poverty, combined with the tendency of the employers to sell the products of their workers, and consequently buy their labor, at the lowest price, constantly reproduces and consolidates the poverty of the proletariat. Since he finds himself in a state of poverty, the worker is compelled to sell his labor for almost nothing, and because he sells that product for almost nothing, he sinks into ever greater poverty.

Yes, greater misery, indeed! For in this galley-slave labor the productive force of the workers, abused, ruthlessly exploited, excessively wasted and underfed, is rapidly used up. And once used up, what can be its value on the market, of what worth is this sole commodity which he possesses and upon the daily sale of which he depends for a livelihood? Nothing! And then? Then nothing is left for the worker but to die.

What, in a given country, is the lowest possible wage? It is the price of that which is considered by the proletarians of that country as absolutely necessary to keep oneself alive. All the bourgeois economists are in agreement on this point. Turgot, who saw fit to call himself the ‘virtuous minister’ of Louis XVI, and really was an honest man, said:

“The simple worker who owns nothing more than his hands, has nothing else to sell than his labor. He sells it more or less expensively; but its price whether high or low, does not depend on him alone: it depends on an agreement with whoever will pay for his labor. The employer pays as little as possible; when given the choice between a great number of workers, the employer prefers the one who works cheap. The workers are, then, forced to lower their price in competition each against the other. In all types of labor, it necessarily follows that the salary of the worker is limited to what is necessary for survival.” (Reflexions sur la formation et la distribution des richesses)

J.B. Say, the true father of bourgeois economists in France also said: “Wages are much higher when more demand exists for labor and less if offered, and are lowered accordingly when more labor is offered and less demanded. It is the relation between supply and demand which regulates the price of this merchandise called the workers’ labor, as are regulated all other public services. When wages rise a little higher than the price necessary for the workers’ families to maintain themselves, their children multiply and a larger supply soon develops in proportion with the greater demand. When, on the contrary, the demand for workers is less than the quantity of people offering to work, their gains decline back to the price necessary for the class to maintain itself at the same number. The families more burdened with children disappear; from them forward the supply of labor declines, and with less labor being offered, the price rises... In such a way it is difficult for the wages of the laborer to rise above or fall below the price necessary to maintain the class (the workers, the proletariat) in the number required.” (Cours complet d’ economie politique)

After citing Turgot and J.B. Say, Proudhon cries: “The price, as compared to the value (in real social economy) is something essentially mobile, consequently, essentially variable, and that in its variations, it is not regulated more than by the concurrence, concurrence, let us not forget, that as Turgot and Say agree, has the necessary effect not to give to wages to the worker more than enough to barely prevent death by starvation, and maintain the class in the numbers needed.”[1]

The current price of primary necessities constitutes the prevailing constant level above which workers’ wages can never rise for a very long time, but beneath which they drop very often, which constantly results in inanition, sickness, and death, until a sufficient number of workers disappear to equalize again the supply of and demand for labor. What the economists call equalized supply and demand does not constitute real equality between those who offer their labor for sale and those who purchase it. Suppose that I, a manufacturer, need a hundred workers and that exactly a hundred workers present themselves in the market — only one hundred, for if more came, the supply would exceed demand, resulting in lowered wages. But since only one hundred appear, and since I, the manufacturer, need only that number — neither more nor less — it would seem at first that complete equality was established; that supply and demand being equal in number, they should likewise be equal in other respects. Does it follow that the workers can demand from me a wage and conditions of work assuring them of a truly free, dignified, and human existence? Not at all! If I grant them those conditions and those wages, I, the capitalist, shall not gain thereby any more than they will. But then, why should I have to plague myself and become ruined by offering them the profits of my capital? If I want to work myself as workers do, I will invest my capital somewhere else, wherever I can get the highest interest, and will offer my labor for sale to some capitalist just as my workers do.

If, profiting by the powerful initiative afforded me by my capital, I ask those hundred workers to fertilize that capital with their labor, it is not because of my sympathy for their sufferings, nor because of a spirit of justice, nor because of love for humanity. The capitalists are by no means philanthropists; they would be ruined if they practiced philanthropy. It is because I hope to draw from the labor of the workers sufficient profit to be able to live comfortably, even richly, while at the same time increasing my capital — and all that without having to work myself. Of course I shall work too, but my work will be of an altogether different kind and I will be remunerated at a much higher rate than the workers. It will not be the work of production but that of administration and exploitation.

But isn’t administrative work also productive work? No doubt it is, for lacking a good and an intelligent administration, manual labor will not produce anything or it will produce very little and very badly. But from the point of view of justice and the needs of production itself, it is not at all necessary that this work should be monopolized in my hands, nor, above all, that I should be compensated at a rate so much higher than manual labor. The cooperative associations already have proven that workers are quite capable of administering industrial enterprises, that it can be done by workers elected from their midst and who receive the same wage. Therefore if I concentrate in my hands the administrative power, it is not because the interests of production demand it, but in order to serve my own ends, the ends of exploitation. As the absolute boss of my establishment I get for my labor ten or twenty times more than my workers get for theirs, and this is true despite the fact that my labor is incomparably less painful than theirs.

But the capitalist, the business owner, runs risks, they say, while the worker risks nothing. This is not true, because when seen from his side, all the disadvantages are on the part of the worker. The business owner can conduct his affairs poorly, he can be wiped out in a bad deal, or be a victim of a commercial crisis, or by an unforeseen catastrophe; in a word he can ruin himself. This is true. But does ruin mean from the bourgeois point of view to be reduced to the same level of misery as those who die of hunger, or to be forced among the ranks of the common laborers? This so rarely happens, that we might as well say never. Afterwards it is rare that the capitalist does not retain something, despite the appearance of ruin. Nowadays all bankruptcies are more or less fraudulent. But if absolutely nothing is saved, there are always family ties, and social relations, who, with help from the business skills learned which they pass to their children, permit them to get positions for themselves and their children in the higher ranks of labor, in management; to be a state functionary, to be an executive in a commercial or industrial business, to end up, although dependent, with an income superior to what they paid their former workers.

The risks of the worker are infinitely greater. After all, if the establishment in which he is employed goes bankrupt, he must go several days and sometimes several weeks without work, and for him it is more than ruin, it is death; because he eats everyday what he earns. The savings of workers are fairy tales invented by bourgeois economists to lull their weak sentiment of justice, the remorse that is awakened by chance in the bosom of their class. This ridiculous and hateful myth will never soothe the anguish of the worker. He knows the expense of satisfying the daily needs of his large family. If he had savings, he would not send his poor children, from the age of six, to wither away, to grow weak, to be murdered physically and morally in the factories, where they are forced to work night and day, a working day of twelve and fourteen hours. If it happens sometimes that the worker makes a small savings, it is quickly consumed by the inevitable periods of unemployment which often cruelly interrupt his work, as well as by the unforeseen accidents and illnesses which befall his family. The accidents and illnesses that can overtake him constitute a risk that makes all the risks of the employer nothing in comparison: because for the worker debilitating illness can destroy his productive ability, his labor power. Over all, prolonged illness is the most terrible bankruptcy, a bankruptcy that means for him and his children, hunger and death.

I know full well that under these conditions that if I were a capitalist, who needs a hundred workers to fertilize my capital, that on employing these workers, all the advantages are for me, all the disadvantages for them. I propose nothing more nor less than to exploit them, and if you wish me to be sincere about it, and promise to guard me well, I will tell them:

“Look, my children, I have some capital which by itself cannot produce anything, because a dead thing cannot produce anything. I have nothing productive without labor. As it goes, I cannot benefit from consuming it unproductively, since having consumed it, I would be left with nothing. But thanks to the social and political institutions which rule over us and are all in my favor, in the existing economy my capital is supposed to be a producer as well: it earns me interest. From whom this interest must be taken — and it must be from someone, since in reality by itself it produces absolutely nothing — this does not concern you. It is enough for you to know that it renders interest. Alone this interest is insufficient to cover my expenses. I am not an ordinary man as you. I cannot be, nor do I want to be, content with little. I want to live, to inhabit a beautiful house, to eat and drink well, to ride in a carriage, to maintain a good appearance, in short, to have all the good things in life. I also want to give a good education to my children, to make them into gentlemen, and send them away to study, and afterwards, having become much more educated than you, they can dominate you one day as I dominate you today. And as education alone is not enough, I want to give them a grand inheritance, so that divided between them they will be left almost as rich as I.

Consequently, besides all the good things in life I want to give myself, I also want to increase my capital. How will I achieve this goal? Armed with this capital I propose to exploit you, and I propose that you permit me to exploit you. You will work and I will collect and appropriate and sell for my own behalf the product of your labor, without giving you more than a portion which is absolutely necessary to keep you from dying of hunger today, so that at the end of tomorrow you will still work for me in the same conditions; and when you have been exhausted, I will throw you out, and replace you with others. Know it well, I will pay you a salary as small, and impose on you a working day as long, working conditions as severe, as despotic, as harsh as possible; not from wickedness — not from a motive of hatred towards you, nor an intent to do you harm — but from the love of wealth and to get rich quick; because the less I pay you and the more you work, the more I will gain.”

This is what is said implicitly by every capitalist, every industrialist, every business owner, every employer who demands the labor power of the workers they hire.

But since supply and demand are equal, why do the workers accept the conditions laid down by the employer? If the capitalist stands in just as great a need of employing the workers as the one hundred workers do of being employed by him, does it not follow that both sides are in an equal position? Do not both meet at the market as two equal merchants — from the juridical point of view at least — one bringing a commodity called a daily wage, to be exchanged for the daily labor of the worker on the basis of so many hours per day; and the other bringing his own labor as his commodity to be exchanged for the wage offered by the capitalist? Since, in our supposition, the demand is for a hundred workers and the supply is likewise that of a hundred persons, it may seem that both sides are in an equal position.

Of course nothing of the kind is true. What is it that brings the capitalist to the market? It is the urge to get rich, to increase his capital, to gratify his ambitions and social vanities, to be able to indulge in all conceivable pleasures. And what brings the worker to the market? Hunger, the necessity of eating today and tomorrow. Thus, while being equal from the point of juridical fiction, the capitalist and the worker are anything but equal from the point of view of the economic situation, which is the real situation. The capitalist is not threatened with hunger when he comes to the market; he knows very well that if he does not find today the workers for whom he is looking, he will still have enough to eat for quite a long time, owing to the capital of which he is the happy possessor. If the workers whom he meets in the market present demands which seem excessive to him, because, far from enabling him to increase his wealth and improve even more his economic position, those proposals and conditions might, I do not say equalize, but bring the economic position of the workers somewhat close to his own — what does he do in that case? He turns down those proposals and waits. After all, he was not impelled by an urgent necessity, but by a desire to improve his position, which, compared to that of the workers, is already quite comfortable, and so he can wait. And he will wait, for his business experience has taught him that the resistance of workers who, possessing neither capital, nor comfort, nor any savings to speak of, are pressed by a relentless necessity, by hunger, that this resistance cannot last very long, and that finally he will be able to find the hundred workers for whom he is looking — for they will be forced to accept the conditions which he finds it profitable to impose upon them. If they refuse, others will come who will be only too happy to accept such conditions. That is how things are done daily with the knowledge and in full view of everyone. If, as a consequence of the particular circumstances that constantly influence the market, the branch of industry in which he planned at first to employ his capital does not offer all the advantages that he had hoped, then he will shift his capital elsewhere; thus the bourgeois capitalist is not tied by nature to any specific industry, but tends to invest (as it is called by the economists — exploit is what we say) indifferently in all possible industries. Let’s suppose, finally, that learning of some industrial incapacity or misfortune, he decides not to invest in any industry; well, he will buy stocks and annuities; and if the interest and dividends seem insufficient, then he will engage in some occupation, or shall we say, sell his labor for a time, but in conditions much more lucrative than he had offered to his own workers.

The capitalist then comes to the market in the capacity, if not of an absolutely free agent, at least that of an infinitely freer agent than the worker. What happens in the market is a meeting between a drive for lucre and starvation, between master and slave. Juridically they are both equal; but economically the worker is the serf of the capitalist, even before the market transaction has been concluded whereby the worker sells his person and his liberty for a given time. The worker is in the position of a serf because this terrible threat of starvation which daily hangs over his head and over his family, will force him to accept any conditions imposed by the gainful calculations of the capitalist, the industrialist, the employer.

And once the contract has been negotiated, the serfdom of the workers is doubly increased; or to put it better, before the contract has been negotiated, goaded by hunger, he is only potentially a serf; after it is negotiated he becomes a serf in fact. Because what merchandise has he sold to his employer? It is his labor, his personal services, the productive forces of his body, mind, and spirit that are found in him and are inseparable from his person — it is therefore himself. From then on, the employer will watch over him, either directly or by means of overseers; everyday during working hours and under controlled conditions, the employer will be the owner of his actions and movements. When he is told: “Do this,” the worker is obligated to do it; or he is told: “Go there,” he must go. Is this not what is called a serf?

M. Karl Marx, the illustrious leader of German Communism, justly observed in his magnificent work Das Kapital[2] that if the contract freely entered into by the vendors of money — in the form of wages — and the vendors of their own labor — that is, between the employer and the workers — were concluded not for a definite and limited term only, but for one’s whole life, it would constitute real slavery. Concluded for a term only and reserving to the worker the right to quit his employer, this contract constitutes a sort of voluntary and transitory serfdom. Yes, transitory and voluntary from the juridical point of view, but nowise from the point of view of economic possibility. The worker always has the right to leave his employer, but has he the means to do so? And if he does quit him, is it in order to lead a free existence, in which he will have no master but himself? No, he does it in order to sell himself to another employer. He is driven to it by the same hunger which forced him to sell himself to the first employer. Thus the worker’s liberty, so much exalted by the economists, jurists, and bourgeois republicans, is only a theoretical freedom, lacking any means for its possible realization, and consequently it is only a fictitious liberty, an utter falsehood. The truth is that the whole life of the worker is simply a continuous and dismaying succession of terms of serfdom — voluntary from the juridical point of view but compulsory in the economic sense — broken up by momentarily brief interludes of freedom accompanied by starvation; in other words, it is real slavery.

This slavery manifests itself daily in all kinds of ways. Apart from the vexations and oppressive conditions of the contract which turn the worker into a subordinate, a passive and obedient servant, and the employer into a nearly absolute master — apart from all that, it is well known that there is hardly an industrial enterprise wherein the owner, impelled on the one hand by the two-fold instinct of an unappeasable lust for profits and absolute power, and on the other hand, profiting by the economic dependence of the worker, does not set aside the terms stipulated in the contract and wring some additional concessions in his own favor. Now he will demand more hours of work, that is, over and above those stipulated in the contract; now he will cut down wages on some pretext; now he will impose arbitrary fines, or he will treat the workers harshly, rudely, and insolently.

But, one may say, in that case the worker can quit. Easier said than done. At times the worker receives part of his wages in advance, or his wife or children may be sick, or perhaps his work is poorly paid throughout this particular industry. Other employers may be paying even less than his own employer, and after quitting this job he may not even be able to find another one. And to remain without a job spells death for him and his family. In addition, there is an understanding among all employers, and all of them resemble one another. All are almost equally irritating, unjust, and harsh.

Is this calumny? No, it is in the nature of things, and in the logical necessity of the relationship existing between the employers and their workers.

[1] Not having to hand the works mentioned, I took these quotes from la Histoire de la Revolution de 1848, by Louis Blanc. Mr. Blanc continues with these words: “We have been well alerted. Now we know, without room for doubt, that according to all the doctrines of the old political economy, wages cannot have any other basis than the regulation between supply and demand, although the result is that the remuneration of labor is reduced to what is strictly necessary to not perish by starvation. Very well, and let us do no more than repeat the words inadvertently spoken in sincerity by Adam Smith, the head of this school: It is small consolation for individuals who have no other means for existence than their labor.” (Bakunin)

[2] Das Kapital, Kritik der politischen Oekonomie, by Karl Marx; Erster Band. This work will need to be translated into French, because nothing, that I know of, contains an analysis so profound, so luminous, so scientific, so decisive, and if I can express it thus, so merciless an expose of the formation of bourgeois capital and the systematic and cruel exploitation that capital continues exercising over the work of the proletariat. The only defect of this work... positivist in direction, based on a profound study of economic works, without admitting any logic other than the logic of the facts — the only defect, say, is that it has been written, in part, but only in part, in a style excessively metaphysical and abstract... which makes it difficult to explain and nearly unapproachable for the majority of workers, and it is principally the workers who must read it nevertheless. The bourgeois will never read it or, if they read it, they will never want to comprehend it, and if they comprehend it they will never say anything about it; this work being nothing other than a sentence of death, scientifically motivated and irrevocably pronounced, not against them as individuals, but against their class. (Bakunin)

(Source: This pamphlet is an excerpt from “The Knouto-Germanic Empire and the Social Revolution” and included in “The Complete Works of Michael Bakunin” under the title “Fragment.” Parts of the text were originally translated into English by G.P. Maximoff for his anthology of Bakunin’s writings, with missing paragraphs translated by Jeff Stein from the Spanish edition, Diego Abad de Santillan, trans. (Buenos Aires 1926) vol. III, pp. 181–196.)