The Common Sense of Socialism / A Series of Letters Addressed to Jonathan Edwards, of Pittsburg

by John Spargo

I know that I could make your wife see the importance of this, my friend. She would tell you that when from time to time you have announced that your wages were to be increased five or ten per cent. she has made plans for spending the money upon little home improvements, or perhaps for laying it aside for the dreaded "rainy day." Perhaps she thought of getting a new rug, or a new sideboard for the dining-room; or perhaps it was a piano for your daughter, who is musical, she had set her heart on getting. The ten per cent. increase seemed to make it all so easy and certain! But after a little while she found that somehow the ten per cent. did not bring the coveted things; that, although she was just as careful as could be, she couldn't save, nor get the things she hoped to get.

Often you and I have heard the cry of trouble: "I don't know how or why it is, but though I get ten per cent. more wages I am no better off than before."

The Socialist theory of value is all right, my friend, and has not been disturbed by the assaults made upon it by a host of little critics. But Socialists have always known that the laws of competitive society do not apply to monopoly, and that the monopolist has an increased power to exploit and oppress the worker. That is one of the chief reasons why we demand that the great monopolies be transformed into common, or social, property.

The fourth principle of Socialist economics is that the wages of the workers represent only a part of the value of their labor product. The remainder is divided among the non-producers in rent, interest and profit. The fortunes of the rich idlers come from the unpaid-for labor of the working class. This is the great theory of "surplus value," which economists are so fond of attacking.

I am not going to say much about the controversy concerning this theory, Jonathan. In the first place, you are not an economist, and there is a great deal in the discussion which is wholly irrelevant and unprofitable; and, in the second place, you can study the question for yourself. There are excellent chapters upon the subject in Vail's Principles of Scientific Socialism, Boudin's The Theoretical System of Karl Marx, and Hyndman's Economics of Socialism. You will also find a simple exposition of the subject in my Socialism, A Summary and Interpretation of Socialist Principles. It will also be well to read Wage-Labor and Capital, a five cent booklet by Karl Marx.

But you do not need to be an economist to understand the essential principles of this theory of surplus value and to judge of its truth. I have never flattered you, Jonathan, as you know; I am in earnest when I say that I am content to leave the matter to your own judgment. I attach more importance to your decision, based upon a plain, matter-of-fact observation of actual life, than to the opinion of many a very learned economist cloistered away from the real world in a musty atmosphere of books and mental abstractions. So think it out for yourself, my friend.

You know that when a man takes a job as a wage-worker, he enters into a contract to give something in return for a certain amount of money. What is it that he thus sells? Not his actual labor, but his power and will to labor. In other words, he undertakes to exert himself in a manner desired by the capitalist who employs him for so much an hour, so much a day, or so much a week as the case may be.

Now, how are the wages fixed? What determines the amount a man gets for his labor? There are several factors. Let us consider them one by one:

First, the man must have enough to keep himself alive and able to work. If he does not get that much he will die, or be unfit to work. Second, in order that the race may be maintained, and that there may be a constant supply of labor, it is necessary that men as a rule should have families. So, as we saw in a quotation from Adam Smith in an earlier letter, the wages must, on an average, be enough to keep, not only the man himself but those dependent upon him. These are the bottom requirements of wages.

Now, the tendency is for wages to keep somewhere near this bottom level. If nothing else interfered they would always tend to that level. First of all, there is no scientific organization of the labor force of the world. Sometimes the demand for labor in a particular trade exceeds the supply, and then wages rise. Sometimes the supply is greater than the demand, and then wages drop toward the bottom level. If the man looking for a job is so fortunate as to know that there are many places open to him, he will not accept low wages; on the other hand, if the employer knows that there are ten men for every job, he will not pay high wages. So, as with the prices of things in general, supply and demand enter into the question of the price of labor in any given time or place.