Karl Marx on Wage Labor: From Natural Abstraction to Formal Subsumption

Marx develops two different theories of the employment relationship. The first is based on an agreement for the sale of a commodity whereby workers cede a flow of abstract labor springing from a stock of labor power. This commodity seems to be a natural abstraction, with the properties of a productive force owned by the worker. Exploitation occurs when the exchange value of the flow of labor power is lower than the value-creating capacity of abstract labor. In the second theory, the employment relationship is based on a transaction establishing workers’ subordination to capitalists and the subsumption of workers’ productive capacities under capital, anticipating the modern theory of the employment contract as an institution determining an authority relationship. This theory is not liable to criticisms of essentialism and naturalism and is able to sustain a consistent and realistic account of capitalist exploitation as based on the command capitalists exert in the production process. © 2018 Association for Economic and Social Analysis.