Marx opens with one question: what does the growth of capital do to the worker's lot? The answer turns on how a capital is split. Part is spent on means of production, such as machines, raw material and buildings. Part is spent on wages. He calls these the constant and the variable parts, and their usual mix the organic composition of capital. He starts with the case that suits labour best, where that mix never changes. Then each new pound of capital needs its share of new hands, the demand for labour grows as fast as capital does, and sooner or later employers run short of workers and wages rise. England heard that complaint in the fifteenth century and again in the first half of the eighteenth. Marx will not call this a rescue, because accumulation of capital is increase of the proletariat. John Bellers wrote in 1696 that the labour of the poor is the mine of the rich. Bernard de Mandeville said the poor should be kept from starving but should receive nothing worth saving. Sir Frederic Eden wanted labourers in "easy and liberal dependence". Better food and clothes, says Marx, no more end the exploitation of a wage worker than they end a slave's. A rise in wages only lets the golden chain the worker has forged for himself hang a little looser. Nor can a rise go far, because the buyer wants only one thing: more value out of the worker than he pays for. If dearer labour blunts the lure of profit, accumulation slows, and the shortage of hands that caused the rise fades. Wages then sink to what the growth of capital needs. So the rate of accumulation is the independent variable and the rate of wages the dependent one. The economists' "natural law of population" is only the relation between unpaid labour turned into capital and the paid labour needed to set that capital moving. In religion, Marx says, man is ruled by the products of his own brain. In capitalist production he is ruled by the products of his own hand. That calm case is only one phase. As accumulation goes on, the productivity of labour becomes its strongest lever, and each worker handles far more machinery and raw material. A capital once split fifty-fifty may come to be eighty to twenty. In spinning, Marx says, it was half and half early in the eighteenth century and is now seven parts in eight constant. The wage bill can still grow in pounds. Take £6,000 that grows to £18,000 and is now split eighty to twenty: the wage part rises from £3,000 to £3,600. But where a 20 per cent rise in capital once raised the demand for labour by 20 per cent, the same rise now needs the original capital to triple. Large-scale work needs capital in private hands, and large-scale work makes more capital faster, so the two feed each other. Individual capitals also grow by splitting and competing, as family fortunes are divided and rivals multiply. Against that comes centralisation, where big capitals swallow small ones. Cheaper goods win the battle of competition. Credit creeps in as a humble helper and becomes a terrible weapon. Joint-stock companies do in a moment what slow accumulation never could, and Marx says the world would still have no railways if it had waited for single capitals to grow big enough. Centralisation also hurries the renewal of old capital, which sheds its skin and returns in a form where fewer hands move more machinery. So new capital draws in fewer workers for its size, and old capital pushes out more of the workers it once had.
From this Marx takes his central step. Let the ratio of constant to variable capital move from 1:1 to 2:1, 3:1, 4:1, 5:1, 7:1. Then only a third, a quarter, a fifth, an eighth of the whole goes into wages. Demand for labour follows the variable part alone, so it falls compared with total capital, and falls faster as capital grows. At the other pole the working population seems to swell more quickly than the jobs. Marx says capitalist accumulation itself keeps producing, in proportion to its own energy, a population larger than capital's average needs. The labouring population makes the means by which it becomes superfluous. Every mode of production has its own law of population, and this is the capitalist one. Then comes the turn. This surplus is a lever of accumulation and a condition of capitalism. It is a disposable industrial reserve army that belongs to capital as completely as if capital had bred it at its own cost. When a market suddenly widens, or a new branch such as railways opens, great masses of men can be thrown on the decisive point without starving production elsewhere. The ten-year cycle of modern industry, with its average activity, high pressure, crisis and stagnation, rests on the constant making, absorbing and remaking of this reserve. Political economy blames the swings of credit. Marx calls credit only a symptom. In the childhood of capitalism the composition of capital changed slowly, so the cycle could not have existed. The apologists half admit all this. H. Merivale, once Professor of Political Economy at Oxford, asks what would follow if the nation sent a few hundred thousand superfluous arms abroad after a crisis. At the first return of demand there would be too few, he says, and manufacturers must have hands ready to use the brisk moment. Malthus agrees that overpopulation serves modern industry. Political economy then speaks to the unemployed in the voice of an old maid: we manufacturers do what we can, and you must adjust your numbers to the means of subsistence. The reserve grows faster than machines alone explain. A capitalist would rather press a given amount of labour from fewer hands, so he swaps skilled workers for less skilled, adults for young people and children, men for women. The overwork of those in jobs swells the reserve, and the pressure of the reserve forces the employed to accept overwork. In 1863 the cotton-spinners of Blackburn protested that some hands were kept at twelve or thirteen hours a day while hundreds sat idle. Marx adds that if labour in England were cut tomorrow to a rational amount and shared by age and sex, the workers to hand could not run production at its present scale. Wages therefore follow the split of the working class into active army and reserve, not the bare head-count. The economists' story runs the other way: wages rise, the poor breed, the market fills, wages fall, and so round again. Marx calls it a beautiful mode of motion, and says the campaign would be won or lost long before a child grew old enough to work. Between 1849 and 1859 farm wages in Wiltshire rose from 7s. to 8s. a week, and in Dorsetshire to 9s. The London Economist spoke of "a general and substantial advance". The farmers did not wait for the labourers to multiply. They bought machinery, and in a moment the labourers were redundant again, this time in absolute numbers. The apologists also say that machines which throw weavers out "set free" capital for workers. Marx replies that machines also free the workers' future replacements, so new capital only soaks up those already thrown out. Capital works on both sides of the market, and the dice are loaded. Workers who learn this, and who try through trade unions to bring the employed and the unemployed together, are told they offend the "sacred" law of supply and demand. In the colonies, where no reserve army exists, capital itself rebels against that law and calls on the State.
