Letters from Tomis

An ongoing series of reflections on Marxist economics after reading What is Marxism: An Introduction into Marxist Theory by Rob Sewell and Alan Woods. The thoughts, opinions, and any errors are mine alone.

Few ideas in economic thought have been more thoroughly misunderstood—both by its detractors and its more zealous adherents—than Karl Marx’s theory of labor-power and wages. That this confusion persists is hardly surprising, given that we live under a system that depends on the deliberate obfuscation of economic reality. A world in which the worker is convinced that his wage represents the full value of his labor is one in which capitalism remains unchallenged and unexamined. But, as Marx sought to demonstrate with his characteristic dialectical ruthlessness, this is an illusion—a sleight of hand performed at the worker’s expense.

To begin, we must distinguish labor-power from labor itself, a distinction that is not merely academic but foundational to the entire Marxist critique of capitalism. Labor, in its simplest form, is the exertion of human effort in the production of goods and services. Labor-power, however, is something altogether more insidious—it is the worker’s capacity to labor, which, under capitalism, is treated as a commodity that can be bought and sold like any other.

This is where the magician’s trick is revealed. The capitalist does not pay the worker for the actual value produced by his labor; he pays only for the cost of reproducing that labor-power—what the worker needs to sustain himself, to return to work the next day, and, crucially, to produce the next generation of laborers. This cost, in turn, is determined not by the true worth of the worker’s output but by historical and social conditions—the level of wages necessary for survival in a given time and place, the bargaining power of labor, and the degree to which workers are organized or atomized.

If this sounds like a system rigged in favor of the capitalist, that’s because it is. The very structure of wage labor ensures that the worker will always produce more value than he receives in return—a phenomenon Marx called surplus value. This difference, the unpaid labor of the worker, is the source of profit. It is the secret ingredient of capital accumulation, the great unspoken theft upon which the entire edifice of modern economics rests. The worker’s productivity may increase, but his wage remains tethered not to his output but to his basic needs. The more efficient he becomes, the more surplus value is extracted, and the more wealth is concentrated at the top.

This, incidentally, is why capitalism cannot abide a truly free and conscious working class. The moment workers recognize that their wages do not reflect the real value of their labor, the entire ideological justification of the system collapses. This is why capitalists, in their infinite benevolence, prefer to frame wages as a matter of market equilibrium, a negotiation between equals, rather than a relationship of exploitation. It is why they invoke the noble fiction of supply and demand while quietly ensuring that labor’s bargaining power remains as weak as possible—through union-busting, wage suppression, and the ever-present specter of unemployment.

But even within the capitalist framework, contradictions abound. The relentless drive for profit compels capitalists to extract more and more surplus value, often through mechanization and efficiency gains that reduce the need for human labor. Yet, in doing so, they create the conditions for their own crisis. Wages are not merely a cost to the capitalist—they are also the means by which workers purchase the very goods they produce. When workers’ wages stagnate while productivity soars, the result is not prosperity but crisis: a world in which goods pile up unsold while workers struggle to afford them, where the same system that boasts of abundance produces artificial scarcity.

This contradiction, which Marx identified with surgical precision, is the Achilles’ heel of capitalism. It is not simply that wages are low—it is that the entire mechanism of wage labor is structured to keep the worker in a permanent state of dependence, his labor endlessly exploited while he is paid just enough to keep the system running. The solution, Marx argued, is not a fairer distribution of wages within capitalism, but an end to the system that treats labor as a commodity in the first place.

The question, then, is whether we will continue to accept this state of affairs as natural or whether we will recognize it for what it is: a historical arrangement that can, and must, be overturned. The struggle over wages is not merely a fight for better pay—it is a fight over the fundamental relationship between labor and capital, a battle not just for a larger piece of the pie but for the bakery itself.

That is the Marxist challenge, and it remains as urgent today as it was in the 19th century. The only real question is whether we are willing to grasp it.