Capitalism is the Wages System
The term “wages system” originated at the time of the Chartist agitation in the 1830s and 1840s. It had been coined by former “domestic workers”, who had previously worked at home on their own spinning or weaving machines, to describe the system which was then increasingly coming into being under which they worked instead in a capitalist’s factory for a wage. This was felt and resented as a loss of independence, as indeed it was, and calls to abolish the wages system and replace it by some form of co-operative production were common among the more radical sections of the working class.
After the decline of Chartism this idea was kept up by isolated ex-Chartists and particularly followers of Robert Owen, some of whom, along with London trade unions, were to form the English section of the International Working Men’s Association in whose foundation in 1864 Marx played a prominent role.
Thus when, in 1865, Marx addressed the General Council of the IWMA in English, to deal with an erroneous view on trade-union activity that had been put forward by the Owenite John Weston (an address published after his death as Value, Price and Profit), it was normal that he should have used the term “wages system” to describe the existing economic system since this would have been the term in use amongst the English-speakers in his audience.
In fact in this address Marx used the term “wages system” much more frequently than the term “capitalist production” which figures in the subtitle of the English version of Capital published in 1887 after his death. And he also made it quite clear that these two terms meant the same for him, speaking at one point of “capitalistic production, or the wages system . . . ” (Chapter VIII).
Ten years later in a criticism (written in German) of the new programme that was to be adopted at Gotha by the German Social Democrats. Marx was to comment that it was more correct to speak of the “system of wage labour” (in German: system der Lohnarbeit) rather than of the “wage system” (Lohnsystem), a fairly minor change which was in fact incorporated in the programme as finally adopted. It still remains true however that “wages system”, “system of wage labour” and “capitalist production” were for Marx all synonyms for what we today call “capitalism” or the “capitalist system”.
Engels in a series of articles he wrote in English in 1881 for the trade union paper The Labour Standard, followed the same practice as Marx of using the term “wages system” to refer to capitalism.
Thus when Marx in 1865 and Engels in 1881 wished to convey to English trade-unionists that they ought to devote their energies rather to getting rid of capitalism they expressed this by urging them to adopt as their objective “the abolition of the wages system”.
Since their time the term “wages system” has dropped out of common usage as a means of describing the existing economic system (despite the fact that it is just as logical a description as “capitalist system” since capitalism is based on both capital and wage-labour; indeed in some ways it is more descriptive). This has allowed some people, even some imagining themselves to be Marxists, to talk about abolishing capitalism without abolishing the wages system.
This would have been an absurdity for Marx and Engels since, as we have just seem, for them capitalism and the wages system were one and the same thing; “capitalistic production” and “wages system” were two alternative ways of describing the same economic system based on the exploitation of wage-labour by capital. Hence to abolish capitalism is to abolish the wages system—and vice versa.