The notion of a contract is one which is vital for Marx’s thinking regarding the nature of bourgeois society and the capitalist mode of production. The following paper will explore Marx’s understanding of the contract in two key ways. The first will be to explain how the contract functions in regard to the maintaing a system of property relations founded on the idea of the sovereign and ‘free’ individual who’s rights are enshrined by the rule of law and the legal protection of property. The second will be to demonstrate how, when considering the nature of Marx’s mature works of Political Economy, it is possible to see how the contract serves to solidify the conditions necessary for the production of capital and value, something which underlies all legal structures and property within this mode of production.

According to the Marx of the ‘Communist Manifesto’ all history is the history of class struggle. If one understands this alongside the essential ideas of historical materialism then it is possible to argue that every change in the form and structure of society has been the result of consistent conflict between those who maintain the power in a certain society and those who are exploited within it. A society founded on the capitalist mode of production is one in which what Marx and Engels term ‘bourgeois’ law is prevalent. The law can be understood to emerge after the fact of the English and French revolutions which saw the removal of sovereign ruler and the enshrinement of a proto-democratic state alongside a thinking of human rights and responsibilities. These human rights are enshrined in law and, typically, they involve the right to the preservation and protection of private property as it remains in the hands of those who benefit most obviously from it. In this sense, it is possible to argue that the State, alongside its legal manifestations and structures can be described as the ‘administrative apparatus of the entire bourgeoisie’ (1994, 165). Contracts serve to protect the property and property rights of those who own the means of production in a society. In order for this to enshrined in a legal system concerning contracts, then it is necessary for each individual to represented as free and equal before the law. However, Marx would argue that this equality is fundamentally false or misleading as it serves, through the use of contracts and other legal strictures, to cover over real differences in privilege and exploitation as they exist across the whole of society itself. In short, while a system of contracts may appear to generate freedom and the legal maintenance of this freedom as they exist within bourgeois society, it effectively serves to protect and maintain the interest of those who have access to property and means of life over and against the proletariat who must be forced, according to a strict system of contracts and wage negotiations, to sell their labour power in order to survive. A free and fair contract within this organisation of society is fundamental hypocrisy which serves to preserve the status of the ruling elite and the illusion of freedom.

This idea of freedom as mediated by a contract which covers real difference is a vital part of the substance of Marx’s political economy as it is described in ‘Das Kapital.’ In the opening section of this book, Marx focuses on the nature of the commodity, that is the object which is produced in capitalist society for no other reason than the making of a profit for those who own the means of production. Marx writes that the distinguishing feature of all commodities and the thing which enables them to be exchanged for each other, despite their otherwise apparent incommensurability, is that fact that they are all ‘products of human labour’ (1994, 223). In order for capitalist exchange to take place, then it is vital that human labour can be stored in a product and that the value which this labour represents can be measured against other values.

Marx suggests therefore that all labour which takes place under the capitalist mode of production is, at the point of the exchange of commodities ‘abstract labour.’ This a homogenous form of labour which is used to determine the value of a good or product, rather than the specific form of labour, i.e. weaving, sculpting or building, which has gone into it. In order for this ‘abstract labour’ to come into place then it is necessary that workers work only for the sake of capitalist production, and that they have been separated from the means of their own survival. Marx writes that this separation can be understood according to a process of double freedom on the behalf of the worker. This double freedom consists in the worker being able to sell their labour power, and in their ‘freedom’ from the means of production. This freedom, together with the maintenance of wage relations which, as Marx writes later in Capital, serves only to shore inequality by giving the illusion of fair payment in a situation which in inherently exploitative, is necessarily enshrined by contracts, especially concerning the wage relationship (1994, 265). Wage agreements, land deeds and rent contracts all serve to ensure the continued perpetuation of a situation of double freedom, and therefore a situation in which value and capital may continue to be accumulated in the interests of those who own property, rather than those who own nothing. It is possible to argue therefore that, without the appearance of a free and fair system of contracts through which property relations are mediated, the very existence of value, and therefore the capitalist mode of production itself, would be impossible.

In conclusion, this paper has argued that contracts are vital for Marx’s view of the inherently exploitative nature of capitalist society. On one hand they shore-up and perpetuate the idea of a sovereign bourgeois individual who is free and equal before the law, regardless of actually existing inequalities, and on the other they serve to provide the ground for the wage relationship and for the universalisation of an abstract labour time, which is itself arguably the most vital component of the capitalist mode of production itself.