(From Marx's Grundrisse manuscript)
Generally speaking, when we look at production based on capital, an essential condition appears to be the combination of the greatest absolute quantity of necessary labour with the greatest relative quantity of surplus labour. Hence as basic condition the greatest possible growth of population—of living labour capacities. If we further look at the conditions for the development of both productive power and exchange, we find that they are the division of labour, cooperation, observation in all directions, which can only be the work of many heads, science, as many centres of exchange as possible — and all these are identical with the growth of population.
On the other hand, it is inherent in the condition for the appropriation of alien surplus labour that necessary population — i.e. the population representing necessary labour, labour necessary for production—is matched by a surplus population, which does not work. In the further development of capital, we find that alongside the industrial part of this surplus population—the industrial capitalists—a purely consuming part branches off. Idlers whose business it is to consume alien products, and [who,] since crude consumption has its limits, have to have a part of these products FORWARDED to them in refined form, as luxury products.
When the economists speak of surplus population, they are not referring to this idle surplus population. On the contrary, it is precisely they, with their consumption business, who are regarded by the population fanatics as necessary population, and [if one takes their view] justly (consistently) so. The expression "surplus population" refers exclusively to labour capacities, i.e. to the necessary population; surplus labour capacities. This arises simply from the nature of capital. Labour capacity can only perform its necessary labour if its surplus labour has value for capital, if it can be valorised by capital. If there are obstacles of one kind or another to its being valorised, labour capacity itself (1) appears to fall outside the conditions of reproduction of its existence; it exists without the conditions of its existence, and is thus A MERE ENCUMBRANCE; it has needs and lacks the means of satisfying them. (2) Necessary labour appears superfluous, because superfluous labour is not necessary. It is necessary only in so far as it is a condition for the valorisation of capital.
Thus the relation between necessary and surplus labour, as it is posited by capital, comes to this, that a part of necessary labour—i.e. of the labour which reproduces the labour capacity— is superfluous, and this labour capacity itself is needed as a surplus of the necessary working population, i.e. of that part of the working population whose necessary labour is not superfluous but necessary for capital. Since the effect of the development of productive power necessarily posited by capital is to increase the ratio of surplus to necessary labour, or to reduce the amount of necessary labour required for a given quantity of surplus labour, then, in a given quantity of labour capacity, the proportion of necessary labour required by capital must constantly diminish, i.e. a part of these labour capacities must become superfluous, because [only] a fraction of the amount previously necessary is now sufficient to perform the given quantity of surplus labour.
Positing a certain portion of labour capacity, i.e. of the labour required to reproduce it, as superfluous, is thus a necessary consequence of the increase in the ratio of surplus to necessary labour. The relative decline of necessary labour appears as a relative increase of surplus labour capacities—i.e. as the positing of surplus population. It is maintained, not out of the wages fund, but out of the income of all classes. It is not maintained by the labour of the labour capacity itself—the worker no longer maintained by his normal reproduction as a worker; he is rather maintained as a living being, by the charity of others. He therefore becomes a derelict and a pauper; in as much as he no longer maintains himself by his necessary labour, by exchange with a part of capital, he has fallen outside the conditions of the apparent relation of exchange and independence. Secondly, society [as a whole] in various proportions takes on for Mr. Capitalist the job of maintaining his virtual instrument of labour—defraying its WEAR and TEAR—keeping it in reserve for later use by him. He passes on a part of the cost of reproducing the working class, and so pauperises a part of the rest of the population for his own profit. On the other hand, since capital constantly reproduces itself as surplus capital, it tends to posit this pauperism just as much as it tends to transcend it. It acts in opposing directions, so that sometimes one tendency prevails, and sometimes the other.
Finally, positing surplus capital implies the following: (1) It needs a growing population in order to be set in motion; if the relative population it needs has diminished, it has itself grown in proportion. (2) It needs an unemployed (relatively, at least) part of the population, i.e. a relative surplus population, in order to have the population necessary for its growth immediately available. (3) At a given level of the productive forces, surplus value may already be present, but not yet to the degree and in the proportions necessary for its employment as capital. Not only is a minimum level of production posited, but of its growth as well. In this case, surplus capital and surplus population. Likewise, a surplus population may be present, but not large enough, not in the proportions required for surplus production. In all this discussion, we have purposely abstracted entirely from the vicissitudes of the market, its contraction, etc., in short from everything which presupposes the process of many capitals.