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Communist Economics
Part 2
Labor vs. Labor Power. Money is an exchange medium, no more or less. The value of a dollar is not set by the intrinsic worth of the paper, ink, artistry, or engraving. Even gold and silver coins are not valuated according to their respective commercial uses. Instead, money is worth exactly that for which it can be traded (purchase).
Labor can be purchased. Laborers exchange their time for a certain amount of money (wage), which in turn is used to purchase goods and services necessary or desired by the laborer. An employer makes a bid, an offer, for this labor through various means (want ad, employment agency, etc). The laborer voluntarily contracts with the employer for a particular wage, which contract is solidified by the action of hiring, accompanied and confirmed by various documentations.
The laborer is normally contracted to work a certain number of hours (workweek, or shift). During the workweek or shift, a minimum of productivity or service is expected in order to retain the position. At times, there may also be a minimum prearranged production or service quota. These are the terms of the bargain, that is, time for money (employment).
The capitalist bargain is twofold. First, that the capitalist shall make a profit over and above the cost of materials, labor, and other expenses. The capitalist has many things invested in his venture, including creative power (the idea or invention), risk (perhaps life savings or mortgaged future), time (which takes away from family and other important options), sweat equity (especially for entrepreneurs), and so forth. For these reasons, there should be no argument whether or not the capitalist is “deserving” to profit from the laborers hired. Second, that the capitalist shall make further profit if the laborers hired exceed the expected or prearranged productivity or service goals. That is, if a laborer can produce in 4 hours that which he was hired to produce in 8 hours, the laborer, still under contract, must continue to produce for another 4 hours. If a contract has any validity, this is true and fair. This is the power of labor, or labor power. The capitalist contracts for labor, but by labor power may (if the laborers are cooperative and satisfactory) leverage more profit than previously believed.
The communist argument is also twofold. First, that the capitalist profits though he does not actually produce anything. This is of course completely false. The capitalist produces by his energy the aforementioned schematic and operating force of the venture. Yet, according to the communist, it is the laborer who has done all the work, and the capitalist who is a swine, his money buying time from the poor defenseless worker. This is of utmost insult to both capitalist and laborer. For except where a corrupt government sanctions monopoly, the capitalist must compete with other capitalists for the finest labor, offering better wages and/or working conditions for quality employees. The laborer also is not a leaf in the wind, having, within free society, options. The laborer has liberty to quit at any time, to move on to greener fields.
But suppose a laborer hasn’t the brains to negotiate the fairest wage, workweek/shift, or working conditions? Or suppose a laborer hasn’t the gumption to resign, being fearful for his future? Is this the responsibility of the capitalist? Or, rather, has the capitalist exploited the laborer? This is a matter of perception. For if he has kept his side of the bargain (contract), providing a certain amount of money in exchange for a certain amount of time, of what concern is it to the capitalist whether or not everything is “fair”? It is not a matter of law, for legal remedies concern that which has previous agreement. Therefore, law being satisfied, it becomes an issue of ethics or morality. Marxism is thus not concerned with business, not even economics, but purely religiosity, and this masked under a guise of anti-religion!
But even here is a stumbling-block for Marx. For if ethics or morality shall be invoked, what is the principle? (1) Is it the avoidance of greed? There is no such biblical principle. Accumulated wealth, while often a barrier to greater spiritual height or depth, has no scriptural limitation! (2) Is it to reject the love of money? If so, shall not this apply to the laborer as well? Did not the laborer enter in with integrity to the bargain? What then compels the laborer to ask for more? Of course, I am being facetious here. It is absolutely acceptable for a laborer to get the highest wage possible but, in the name of fairness, it must be equally acceptable for the capitalist to drive his hardest bargain, that is, to find his lowest cost for any good or service, including that of labor. (3) Is it stealing? Not so, for, all weights and measures being equal, there is no theft in bargaining.
The presupposition is that both capitalist and laborer work under an umbrella of ethics or morality. For the communist, this must serve the “collective [common] good.” Morality, however, does not concern communities but individuals (community sin is composed from individual sins). Thus, a communist asserting morality as basis for any argument is as a gazelle deciding to lie down with lions – it does not fit and it has no strength.
In one area, however, the communist triumphs. It is the acceptance by many laborers that they are easily exploitable. The logical extrapolation is that such laborers believe themselves to have a low mental quality, that is, are able to be outsmarted by a crafty capitalist. This leaves open the door for organization, that is, unionization, which itself demands some dehumanization (herd mentality) in order to achieve collective goals. Thereby, everything feared comes true, only in a form which rewards coveting.
The second communist argument is that profit itself exploits by its exponential nature. For if a company is profitable, it many times expands with greater employment, thereby multiplying the “exploitation” of laborers. But even if a company is profitable and does not hire more labor, the communist supposes the exploitation of the laborers to be increased by their heavier workload. In a worse economy, exploitation is by psychological blackmail, that is, through the fear of losing one’s fortunate retention of employment. It is an all-around winning position for the communist, again by means of perception. However, these perceptions are rooted in the notion that human beings, but animals (whether capitalist pig/ravening wolf or laboring sheep), require superior guidance and intervention from a collective entity, that is, the state.
To sum up, labor power is the power of labor to match or exceed a production or service requirement within a certain space of time (workweek, shift) and for a certain amount of money paid out (wage). This is the expectation of the capitalist but the grievance of the communist. Obviously, there can be no meeting of the minds.
With private property, capitalization is always possible, enabling “exploitation” to pervade universally and completely. This explains why the primary goal of communism must be the abolition of private property. Such view, however, is based not upon fact but hope. It is only the promise of some better life, ultimately a utopia to replace the sodden reality of labor, which motivates in this direction.
Marx posited that “specialization” of labor causes the laborer to be “alienated” from his humanity. In other words, unskilled or uneducated labor is a dehumanization. This is the trick of Marxism, to empathize dearly with those who feel not human but as animals, corralled, exploited, and finally discarded. A laborer who feels trapped within his job or industry (specialization), having few alternative prospects or, rather, alternative ideas, is more likely to side with this communist doggerel.
To ostensibly overcome this dehumanization, this alienation, the communist radicalizes youth and other sympathizers into demanding free college or vocational education, broadcast as the liberation of the laborer (or future laborer) through non-specialization or multiple specializations. This is superficially reasonable until one realizes that if all labor were so educated they would once again equalize to that same playing field, which is the plain of available employment. The result? An overabundance of skill, leading again to that specialization which communism cannot condone. It is futility.
Universal education also poses a riddle which cannot be solved. For if everyone is to be educated, who shall teach? If we say that teachers shall be trained and relocated, what is the motivation? Without regard to quality of student, we cannot expect quality of teacher. Thus, the irony is that universal education must lead to universal mediocrity. On the other hand, if one teacher is superior to another, one set of students should in likelihood become better suited for their eventual goal. Communism, however, having as its tenet the abolition of competition, cannot abide this inequality.
Understanding these paradoxes, the communist demands full employment. This supposedly counteracts that segment of labor displaced by sameness. Yet again, the implementation demands a much larger and more intrusive form of government, the communist state, which end must be slavery and rationing. Logically, there is no other conclusion. Historically, this has been the result.
Marx’s Wage-Labour and Capital: Preliminary.
“From various quarters we have been reproached for neglecting to portray the economic conditions which form the material basis of the present struggles between classes and nations. With set purpose we have hitherto touched upon these conditions only when they forced themselves upon the surface of the political conflicts.”
From this we learn that Wage-Labour and Capital is the first Marxist economic treatise of any substance, an important though oft-dismissed document.
“It was necessary, beyond everything else, to follow the development of the class struggle in the history of our own day, and to prove empirically, by the actual and daily newly created historical material, that with the subjugation of the working class, accomplished in the days of February and March, 1848, the opponents of that class – the bourgeois republicans in France, and the bourgeois and peasant classes who were fighting feudal absolutism throughout the whole continent of Europe – were simultaneously conquered; that the victory of the "moderate republic" in France sounded at the same time the fall of the nations which had responded to the February revolution with heroic wars of independence; and finally that, by the victory over the revolutionary workingmen, Europe fell back into its old double slavery, into the English-Russian slavery. The June conflict in Paris, the fall of Vienna, the tragi-comedy in Berlin in November 1848, the desperate efforts of Poland, Italy, and Hungary, the starvation of Ireland into submission – these were the chief events in which the European class struggle between the bourgeoisie and the working class was summed up, and from which we proved that every revolutionary uprising, however remote from the class struggle its object might appear, must of necessity fail until the revolutionary working class shall have conquered; – that every social reform must remain a Utopia until the proletarian revolution and the feudalistic counter-revolution have been pitted against each other in a world-wide war. In our presentation, as in reality, Belgium and Switzerland were tragicomic caricaturish genre pictures in the great historic tableau; the one the model State of the bourgeois monarchy, the other the model State of the bourgeois republic; both of them, States that flatter themselves to be just as free from the class struggle as from the European revolution.”
But now, after our readers have seen the class struggle of the year 1848 develop into colossal political proportions, it is time to examine more closely the economic conditions themselves upon which is founded the existence of the capitalist class and its class rule, as well as the slavery of the workers.
We shall present the subject in three great divisions:
The Relation of Wage-labour to Capital, the Slavery of the Worker, the Rule of the Capitalist.
The Inevitable Ruin of the Middle Classes [petty-bourgeois] and the so-called Commons [peasants] under the present system.
The Commercial Subjugation and Exploitation of the Bourgeois classes of the various European nations by the Despot of the World Market – England.
We shall seek to portray this as simply and popularly as possible, and shall not presuppose a knowledge of even the most elementary notions of political economy. We wish to be understood by the workers. And, moreover, there prevails in Germany the most remarkable ignorance and confusion of ideas in regard to the simplest economic relations, from the patented defenders of existing conditions, down to the socialist wonder-workers and the unrecognized political geniuses, in which divided Germany is even richer than in duodecimo princelings. We therefore proceed to the consideration of the first problem.”
Of note for our present day is that the communist has not altered his approach. It is still supposed every moment that society is composed of two classes only, the capitalist and the laborer, all others being offshoots, cousins, or in service to the capitalist. The parallels between yesterday and today are striking and omnipresent: (1) that industrialist money is the overriding corrupting influence, (2) that the laborer, the proletarian, is uneducated, without economic principles endowed, (3) that the communist is alert and active, providing the necessary antithesis to attain the correct synthesis. This boils down again to the Oppressor-Victim-Savior triangle which the communist ever invokes and sadly is able to employ in the most subtle and far-reaching manners. For it is that every generation, and every age segmentation within that generation, carries the pains and agonies of life itself, and many are ready and eager to find a scapegoat on which to hang these travails. The communist is especially equipped to facilitate every such leaning.
Marx’s Wage-Labour and Capital: What Are Wages?
“If several workmen were to be asked: "How much wages do you get?", one would reply, "I get two shillings a day", and so on. According to the different branches of industry in which they are employed, they would mention different sums of money that they receive from their respective employers for the completion of a certain task; for example, for weaving a yard of linen, or for setting a page of type. Despite the variety of their statements, they would all agree upon one point: that wages are the amount of money which the capitalist pays for a certain period of work or for a certain amount of work.
Consequently, it appears that the capitalist buys their labour with money, and that for money they sell him their labour. But this is merely an illusion. What they actually sell to the capitalist for money is their labour-power. This labour-power the capitalist buys for a day, a week, a month, etc. And after he has bought it, he uses it up by letting the worker labour during the stipulated time. With the same amount of money with which the capitalist has bought their labour-power (for example, with two shillings) he could have bought a certain amount of sugar or of any other commodity. The two shillings with which he bought 20 pounds of sugar is the price of the 20 pounds of sugar. The two shillings with which he bought 12 hours' use of labour-power, is the price of 12 hours' labour. Labour-power, then, is a commodity, no more, no less so than is the sugar. The first is measured by the clock, the other by the scales.
Their commodity, labour-power, the workers exchange for the commodity of the capitalist, for money, and, moreover, this exchange takes place at a certain ratio. So much money for so long a use of labour-power. For 12 hours' weaving, two shillings. And these two shillings, do they not represent all the other commodities which I can buy for two shillings? Therefore, actually, the worker has exchanged his commodity, labour-power, for commodities of all kinds, and, moreover, at a certain ratio. By giving him two shillings, the capitalist has given him so much meat, so much clothing, so much wood, light, etc., in exchange for his day's work. The two shillings therefore express the relation in which labour-power is exchanged for other commodities, the exchange-value of labour-power.
The exchange value of a commodity estimated in money is called its price. Wages therefore are only a special name for the price of labour-power, and are usually called the price of labour; it is the special name for the price of this peculiar commodity, which has no other repository than human flesh and blood.
Let us take any worker; for example, a weaver. The capitalist supplies him with the loom and yarn. The weaver applies himself to work, and the yarn is turned into cloth. The capitalist takes possession of the cloth and sells it for 20 shillings, for example. Now are the wages of the weaver a share of the cloth, of the 20 shillings, of the product of the work? By no means. Long before the cloth is sold, perhaps long before it is fully woven, the weaver has received his wages. The capitalist, then, does not pay his wages out of the money which he will obtain from the cloth, but out of money already on hand. Just as little as loom and yarn are the product of the weaver to whom they are supplied by the employer, just so little are the commodities which he receives in exchange for his commodity – labour-power – his product. It is possible that the employer found no purchasers at all for the cloth. It is possible that he did not get even the amount of the wages by its sale. It is possible that he sells it very profitably in proportion to the weaver's wages. But all that does not concern the weaver. With a part of his existing wealth, of his capital, the capitalist buys the labour-power of the weaver in exactly the same manner as, with another part of his wealth, he has bought the raw material – the yarn – and the instrument of labour – the loom. After he has made these purchases, and among them belongs the labour-power necessary to the production of the cloth he produces only with raw materials and instruments of labour belonging to him. For our good weaver, too, is one of the instruments of labour, and being in this respect on a par with the loom, he has no more share in the product (the cloth), or in the price of the product, than the loom itself has.
Wages, therefore, are not a share of the worker in the commodities produced by himself. Wages are that part of already existing commodities with which the capitalist buys a certain amount of productive labour-power.
Consequently, labour-power is a commodity which its possessor, the wage-worker, sells to the capitalist. Why does he sell it? It is in order to live.
But the putting of labour-power into action – i.e., the work – is the active expression of the labourer's own life. And this life activity he sells to another person in order to secure the necessary means of life. His life-activity, therefore, is but a means of securing his own existence. He works that he may keep alive. He does not count the labour itself as a part of his life; it is rather a sacrifice of his life. It is a commodity that he has auctioned off to another. The product of his activity, therefore, is not the aim of his activity. What he produces for himself is not the silk that he weaves, not the gold that he draws up the mining shaft, not the palace that he builds. What he produces for himself is wages; and the silk, the gold, and the palace are resolved for him into a certain quantity of necessaries of life, perhaps into a cotton jacket, into copper coins, and into a basement dwelling. And the labourer who for 12 hours long, weaves, spins, bores, turns, builds, shovels, breaks stone, carries hods, and so on – is this 12 hours' weaving, spinning, boring, turning, building, shovelling, stone-breaking, regarded by him as a manifestation of life, as life? Quite the contrary. Life for him begins where this activity ceases, at the table, at the tavern, in bed. The 12 hours' work, on the other hand, has no meaning for him as weaving, spinning, boring, and so on, but only as earnings, which enable him to sit down at a table, to take his seat in the tavern, and to lie down in a bed. If the silk-worm's object in spinning were to prolong its existence as caterpillar, it would be a perfect example of a wage-worker.
Labour-power was not always a commodity (merchandise). Labour was not always wage-labour, i.e., free labour. The slave did not sell his labour-power to the slave-owner, any more than the ox sells his labour to the farmer. The slave, together with his labour-power, was sold to his owner once for all. He is a commodity that can pass from the hand of one owner to that of another. He himself is a commodity, but his labour-power is not his commodity. The serf sells only a portion of his labour-power. It is not he who receives wages from the owner of the land; it is rather the owner of the land who receives a tribute from him. The serf belongs to the soil, and to the lord of the soil he brings its fruit. The free labourer, on the other hand, sells his very self, and that by fractions. He auctions off eight, 10, 12, 15 hours of his life, one day like the next, to the highest bidder, to the owner of raw materials, tools, and the means of life – i.e., to the capitalist. The labourer belongs neither to an owner nor to the soil, but eight, 10, 12, 15 hours of his daily life belong to whomsoever buys them. The worker leaves the capitalist, to whom he has sold himself, as often as he chooses, and the capitalist discharges him as often as he sees fit, as soon as he no longer gets any use, or not the required use, out of him. But the worker, whose only source of income is the sale of his labour-power, cannot leave the whole class of buyers, i.e., the capitalist class, unless he gives up his own existence. He does not belong to this or that capitalist, but to the capitalist class; and it is for him to find his man – i.e., to find a buyer in this capitalist class.”
According to Marx, an inherent fallacy in capitalist society is the belief that a laborer is a free man. This concept is filled with error.
First, while true that under capitalism many laborers never transcend beyond that status, there is no denying that entrepreneurship, that is, risk-taking for financial independence, proliferates beside it. That capitalism is able, even willing, to accommodate the small businessman dilutes the argument that such system disallows advancement.
Second, the “buyer class” mentioned by Marx is a red herring (pun intended). For once the capitalist system is so named, it is impossible to distinguish between “middle class” or any other class, all being part of a consumer society which ostensibly gobbles and is gobbled simultaneously. The imagery of the greedy capitalist matched to the animalistic laborer is simply a deceptive depiction of dehumanization (albeit for both sides) which the communist must deliver in order to stoke fires of compassion, guilt, fear, anger, and so forth.
Third, while cheap labor is the lifeblood of capitalism, it provides a systemic expanding lifestyle (“all boats rising”). Unions may take credit for this phenomenon, the result of strikes and negotiation, pensions and benefits, but unions also owe their existence to capitalism! That industrialists relocate once wages and benefits (or other factors) rise above a certain level is a testament also to capitalism’s ability to spread wide prosperity, even beyond its own interests! But let us be careful when judging capitalism through the lens of worker exploitation within nations which do not esteem natural rights, for it must be the governments of these nations which take the responsibility for moral governance. If we instead lay blame or responsibility at the doorstep of capitalism, we fall prey to the trap of communism, that is, false morality posing as economic theory. The Marxist trap, the false morality, is to say that the laborer has his time, in fact his life, stolen by the greedy capitalist, who pays only a living wage and no more, perhaps less. This is the Victim-Oppressor relationship, mere psychological perception, for which communism is offered as the Savior. Let us, however, always recall that communism has shown itself to be more merciless than any mere greed of corporatism, a cruel but real distinction.
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