Labor Power - The Role of The State

The Role of The State

The state can influence both the value and price of labour-power in numerous different ways, and normally it regulates wages and working conditions in the labour market to a greater or lesser extent. It can do so for example by:

• Stipulating minimum and maximum wage rates for work.
• Stipulating maximum and minimum working hours, and the retirement age.
• Stipulating minimum requirements for working conditions, workplace health & safety issues and the like.
• Stipulating requirements for labour contracts, trade union organization and wage bargaining.
• Legally defining the civil rights and entitlements of the workers.
• Adjusting direct and indirect tax rates, levies and tariffs for wage earners and employers in various ways.
• Adjusting social insurance policies, pension charges/claims and the like.
• Instituting and adjusting unemployment benefits and other social benefits.
• Subsidizing workers or their employers in various ways through eligibility to various benefits or supplements to salary.
• Influencing the general price level, by means of fiscal policy and monetary policy, or by instituting price controls for consumer goods and services.
• Regulating the consumption of goods and services by workers.
• Policing workers on the job and off-work, and prosecuting criminal activity with respect to workers' lives.
• Requiring military service from young workers at fixed pay rates.
• Creating additional jobs and employment by means of various policies, or, permitting unemployment to grow.
• Encouraging or preventing labour mobility and job mobility.
• Permitting or preventing the inflow of immigrant workers, or the emigration of workers.
• Stipulating legal requirements relating to the accommodation, health, sex life, family situation and pregnancy of workers.

Marx was very aware of this and in Das Kapital provides many illustrations, often taken from the Blue books and factory inspector's reports. Part of the role of the state is to secure those general (collective) conditions for the reproduction and maintenance of workers which individuals and private enterprise cannot secure by themselves for one reason or another - for example, because:

• providing those conditions practically requires an authority which stands above competing interests.
• meeting the conditions is too costly for private agencies, requiring investment funds not available to them.
• it is technically not possible to privatize those conditions.
• the conditions that have to be supplied are not sufficiently profitable, or too risky for private agencies.
• there is a specific political or moral reason why the state should intervene.

However, Marx did not provide a general theory of the state and the labour market. He intended to write a separate book on the subject of wages and the labour market (see Capital Vol. 1, Penguin edition, p. 683), but did not accomplish it, mainly because of bad health. Nevertheless Marx made quite clear his belief that capitalism "overturns all the legal or traditional barriers that would prevent it from buying this or that kind of labour-power as it sees fit, or from appropriating this or that kind of labour" (Ibid., p. 1013). It is possible - apart from bad health - that he did not write a general critique of the state, because he lived himself as an exile in Britain, and therefore, he might have got into major trouble personally, if he had criticized the state publicly in his writings in ways not acceptable to the British state.

In modern times, the fact that the state has a big effect on wages and the value of labour power has given rise to the concepts of the social wage and collective consumption. If the state claims just as much money from workers through taxes and levies as it pays out to them, then it is of course doubtful whether the state really "pays a social wage". However, more often the state redistributes income from one group or workers to another, reducing the income of some and increasing that of others.