A wage is a price, and like every price it is settled in a bargain; but it is a bargain struck between parties who do not stand on level ground. On one side is a man who must eat this week, and whose children must eat beside him; on the other, an employer who can leave the post unfilled a month and be merely inconvenienced. Adam Smith, too often read as the prophet of the market left alone, saw this with perfect clarity in 1776: it is not difficult, he wrote, to foresee which of the two parties must, on ordinary occasions, force the other to its terms. The worker enters the negotiation already behind, and the wage he carries out of it is shaped, before anything else, by how far behind he began.
Smith set down the sources of the worker's disadvantage with a candor his admirers have often preferred to forget. The masters are fewer, and so combine the more easily — tacitly, by mere acquaintance, without ever needing to meet; the law for centuries lent their combinations its blessing while branding the workers' a conspiracy; and behind both of these stood the plainest fact of all, that in any test of endurance the master can outlast the man. A merchant can live a year or two on what he has laid by; a laborer with a family cannot live a week. When the contest is over who will starve first, the wage is settled before it is begun. None of this requires a wicked employer or a rigged market — only the ordinary arithmetic of who can afford to wait, and that arithmetic tilts, in the common case, one way.
And there is a deeper reason the worker cannot afford to wait, one built into the very thing he has to sell. Labor does not keep. The farmer whose grain fetches a poor price can store it in the barn and bring it back to market next season; the worker cannot store the hour he does not work, for it is gone at the stroke of the clock and can never be sold afterward at all. He brings to market the one good that spoils completely and at once, and he brings it fixed to a body that must be fed every day whether the good is sold or not. A seller who cannot withhold his wares to wait out a low offer has no power to withhold, and the worker is, by the very nature of his ware, exactly that seller. The wheat can wait. The hour cannot, and neither can the hunger.
This points to the strangest thing about the wage, which is that the thing it prices is not really a commodity at all. Wheat is grown to be sold; iron is smelted to be sold; they are made, from the first, for the market. A human being is not. Labor is only the life-activity of a person — his hours, his strength, his attention, his years — given another name and carried to a market it was never produced for. Karl Polanyi called labor a fictitious commodity, one the economy treats as though made for sale though it manifestly was not, and warned that the fiction, indispensable as a modern economy finds it, carries a human cost the society must somehow cushion or be torn apart by. The law has now and then said as much, in words as plain as it ever uses — that the labor of a human being is not a commodity. It troubled to declare this precisely because the market, left to itself, assumes the opposite.
Nor does the wage bargain end, as the sale of wheat ends, with the handing over of a good and the parting of the parties. It begins a relationship, and a relationship of a particular and uncomfortable kind: to take a wage is to agree, within limits, to do as one is told. The worker does not deliver a fixed quantity of labor and walk away; he places himself, for the hours he has sold, under another's direction. Ronald Coase found in exactly this the reason firms exist at all — that within the firm the price mechanism is suspended and replaced by command, an island of conscious authority in the open sea of the market. The wage, then, buys something stranger than a measured thing. It buys obedience, bounded but real, the agreement to be directed — and what that authority is, and where its limits lie, is the matter of the table's fourteenth volume. That the wage purchases it at all is part of what sets the wage apart from any ordinary price.
The bargain is not struck in private, either, between two parties alone. Behind the worker at the table stands a crowd he cannot see but the employer can: the unemployed, the ones who would take the post at the offered wage or beneath it. Marx named them the industrial reserve army and gave them a function — that their mere existence disciplines everyone in work, since the worker who presses too hard for too much can simply be replaced from the ranks of those with nothing. On this reading unemployment is not only a misfortune that falls on the jobless; it is a pressure bearing on the employed, weakening the hand of every worker who still holds a place. The size of that reserve is therefore not incidental to the wage. It is one of the wage's hidden terms.
This is among the few of Marx's mechanisms the most orthodox economist will grant without much argument, for it is visible in the data of every cycle. When work is scarce and the reserve is full, wages stagnate and the worker dares not ask; when work is plentiful and the reserve runs dry, wages climb and the worker can at last bargain from something other than fear. Power in the labor market follows the tightness of the market as the tide follows the moon. And it is a sobering thought, to which the volume returns, that a central bank raising interest rates to cool an overheating economy is, whatever else it means to do, deliberately refilling the reserve — adjusting, by the blunt instrument of unemployment, the balance of power in every wage bargain in the country at once.
And yet to leave the bargain here — all asymmetry, all power, all pressure — would be to miss the thing that keeps it from being a simple robbery, and that hands the worker, even at his weakest, a card the theory of pure power cannot see. It is this: the labor a contract can buy is not the labor the employer actually needs. He can buy the worker's time, and his presence, and can set down his tasks in detail; he cannot buy his effort, his care, his judgment, his willingness to notice what the rules did not foresee — none of which can be fully watched, or written down, or enforced. The contract is radically incomplete. It secures the body in the chair and leaves wide open the question of whether anything useful will be done there. And that open question hands back to the worker a quiet power the bargain over wages had seemed to deny him.
For if effort cannot be commanded, it must somehow be drawn out, and the means of drawing it out bend the wage back upward. An employer who pays only the least a worker will accept gets, in return, the least the worker can contrive to give; one who pays something more — more than the market requires, more than the bare bargain would yield — may find the difference repaid many times in effort freely given, in care taken, in the worker who stays rather than leaves and works rather than shirks. Economists have modeled this as a wage paid to discipline shirking, and have recast it, more humanely, as a kind of gift exchange: a fair wage offered and extra effort returned, a reciprocity sustained not by the contract but by the sense, on both sides, of what is decent. Whatever the model, the lesson cuts against the pure power story. The wage is not only wrung from the worker; some part of it is offered, because only an offered wage buys willing work.
Here, then, is the foundation the rest of the volume is built upon. The wage is the primal scene of the whole inquiry — the place where the hidden contest is barely hidden at all, since the bargain is a literal negotiation, and where the pretense that the wage is a fact, a figure set by impersonal forces and reported like the weather, is at its most threadbare. For the wage is a settlement: struck between parties who are not equals, over a thing that is not truly a commodity, in the shadow of the unemployed, and softened — where it is softened — by what neither side can write into the contract. Everything the later plates examine happens inside this frame. The claim that the wage measures the worker's product names a ceiling and a benchmark; the single buyer names one source of the employer's advantage; the union names the worker's reply; the premium for skill names what the worker brings. But beneath all of them lies the bargain, and the bargain is unequal before any of them is reached.
A wage is a bargain wearing the clothes of a price.
It would be as much an error, though, to call the bargain a pure war as to call it a fair exchange. It is neither, and its refusal to be either is the truth this plate exists to hold. There is power in it, gross and measurable, tilting in the common case toward the side that can wait. There is fairness in it too — real enough that a worker who believes himself cheated withholds the effort no contract can compel, so that the employer's notion of a just wage and the worker's become, willy-nilly, part of what the wage is. And there is the plain fact that the wage must, in the end, secure not a quantity of labor but the willing work of a living person, which no amount of power alone can guarantee. The wage that emerges carries all of this folded into a single figure — the staying power of each side, the depth of the reserve, the law's old thumb on the scale, and the irreducible need of the buyer for the seller's good will.
We are taught to read a price as a fact about the world — a number that simply obtains, like a temperature, owing nothing to anyone's will. The wage refuses the lesson. It is a bargain, and a bargain is a contest, however quietly conducted and however it is dressed; to call it the price of labor is already to have swallowed the fiction that the hours of a life are a commodity with a market value written into them. They are not. The figure on the contract is a verdict — on who could afford to wait, on how many waited behind him, on what the relationship required and what the law allowed — mistaken, because it arrives wearing the clothes of a price, for a fact of nature. A price is a verdict on a hidden contest, mistaken for a fact of nature; the wage is the first of these, and the most personal, and the bargain is the room in which the verdict is reached. The argument remains open.