Monday, March 12, 2012

Lesson 24: Communist Economics 4: Wages

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Communist Economics

Part 4

Marx’s Wage-Labour and Capital:

By What are Wages Determined?

We continue this week plumbing the depths of Marxian economics. As you read, keep in mind that the foundational beliefs herein are almost identical to chanting from Occupy, to liberal pontifications within Congress, and to whining from assorted bleeding hearts. Sadly, neither the failures of socialism nor the excesses of so-called communist nations have dulled the appetite for this tripe. Thus, it is in our best interests to know these things intimately, for we shall see and hear them daily.


“Now, the same general laws which regulate the price of commodities in general, naturally regulate wages, or the price of labour-power. Wages will now rise, now fall, according to the relation of supply and demand, according as competition shapes itself between the buyers of labour-power, the capitalists, and the sellers of labour-power, the workers. The fluctuations of wages correspond to the fluctuation in the price of commodities in general.”

Marx incorporates an integral error, and I think intentionally. First, the error is actually compound. It begins with the notion that commodities prices revolve to great degree around “general laws.” As explained in the previous installment to this series, Marx has misapplied or greatly exaggerated such so-called laws. The continuation of the error is that wages, given some measure of analogy to commodities prices, are subject to those same general laws. Such supposition negates the wide variety of human interaction, but more importantly also ignores our experience with capitalism, which provides that competition among employers for the best laborers, especially in times of low unemployment, greatly distorts static, especially Marxian, valuation systems. It might be argued with some force that mine is merely an offshoot description for the law of supply and demand. At some base level, this is true, but such argument oversimplifies the inherent complexity of wage fixing in the same manner that Marx oversimplifies valuations to be intrinsic, that is, mechanical. Thereby has Marx given a subtle yet open condemnation of capitalism, forming foundation for that primary Marxist grievance, the dehumanization of the laborer. By the suggestion that the valuations of capitalism shackle human labor as an ox to the plow, whatever follows from Marx is meant to appear as liberating, as a Savior of the Victim proletariat from the Oppressor capitalist. The laborer has been demeaned, is angry, and ostensibly is ready to rise up. This is not only (proper) Hegelian dialectic but also deliberate psychology laid by Marx.

“But within the limits of these fluctuations the price of labour-power will be determined by the cost of production, by the labour-time necessary for production of this commodity: labour-power. What, then, is the cost of production of labour-power? It is the cost required for the maintenance of the labourer as a labourer, and for his education and training as a labourer. Therefore, the shorter the time required for training up to a particular sort of work, the smaller is the cost of production of the worker, the lower is the price of his labour-power, his wages.”

Grossly misstating economic theory, Marx intends to align the proletariat as slaves. Marx ignores his own first rule of supply and demand. For if education, whether of college, vocational school, or on-the-job training, sets the price of labour-power, it cannot be that supply and demand thwarts such an equation. If many students train to be attorneys, the resulting glut of lawyers in no way lowers the cost to hire, for one is employing expertise (and reputation). The same may be said for the machinist, the physician, or any other skilled laborer. Thus, while Marx has the right idea concerning the duration of education as an arbiter and forecaster of future wages, he cannot otherwise prove that case as against the price of proletariat labor-power. If there are 10,000 applicants for the same unskilled laborer position, the one who is hired is likely to be the best-trained and therefore to command the best salary also. The employer who would hire the cheapest labor often finds side-effects such as sloppy workmanship, poor moral character, and insubordination to be insufferable, and soon in turn becomes one who hires the best worker, not the least costly.

This detail of Marxian economics is further debilitated when one considers that under capitalism is a constant stream of new would-be entrepreneurs who, being ignorant of the pitfalls, do in fact hire cheap labor. This is actually a blessing to the labor marketplace, for without such neophyte businessmen those worse laborers would remain unemployed, creating for society even worse problems, whether welfare, crime, or vagrancy. A strong capitalist system is thus the wisest of frameworks. It could be argued that, by permitting inexperienced shop-owners to proliferate, capitalism causes a vast number of laborers to remain unskilled and therefore low-wage, barely able to make ends meet, little more than slaves. This assumes many things, primarily that capitalism would be of far greater value if it were smartly regulated. But the more regulated, the less capitalist, that is, the more fascist, for it takes an elite (does it not?) to opine wisely upon the standards which must be best for all. Clearly, the argument is meant to spur conversation over which central governance system is best capable to snuff out the inefficiencies of capitalism. Those inefficiencies, however, reflect inherent freedom, including freedom to fail, whereas the “efficiency” of communism is in its totalitarianism.

“In those branches of industry in which hardly any period of apprenticeship is necessary and the mere bodily existence of the worker is sufficient, the cost of his production is limited almost exclusively to the commodities necessary for keeping him in working condition. The price of his work will therefore be determined by the price of the necessary means of subsistence.”

The assumption is that the very unskilled laborer, for example, one who wheelbarrows materials from one place to another, is likely to earn less per hour (to choose a duration) than the more skilled laborer, for example, a carpenter. Who shall deny this? Yet this is not indicative of inequality. It is not even a matter of deservedness. For the unskilled worker is NOT a lesser quality of the same commodity but is a DIFFERENT commodity than the skilled worker! The comparison of skilled to unskilled laborer is as silk to cotton. They serve different needs, and in actuality are related in price only as pegged to a common currency. There is not an employer in the world who would knowingly hire an architect by trade to replace a licensed electrician, or vice versa (unless both skills were within that particular person). By the same token, if two electricians apply for the same position, no sane employer hires for the same wage the electrician of lesser skill (except perhaps for nepotism’s sake). The upshot here is that if Marxist economics demands equalization of wage irrespective of skill, it ignores reality.

If a highest wage is desired, it is the responsibility of a laborer to become as skilled as possible in his chosen field. However, the unskilled laborer, Marx accuses, is only able under capitalism to barely get by, having no hope for improvement or advancement. It is thus all desolation and alienation, horror and sadness. The goal of Marxism is to stoke such pathos, to exacerbate it to resentment, to express it as grievance, and finally to organize it into revolution.

But was Marx right? Is the unskilled worker destined only for hardship? In the main, the growth of capitalism has generated more opportunity and a better lifestyle for the majority, that is, for the working class. One might complain that the boom-bust cycles of capitalism (including and especially the housing collapse from 2008) cause ruin, but this complaint is actually against the Keynesian expansion of money supply, not against free entrepreneurship. To win this argument, the Marxist must invoke a false dialectic.

“Here, however, there enters another consideration. The manufacturer who calculates his cost of production and, in accordance with it, the price of the product, takes into account the wear and tear of the instruments of labour. If a machine costs him, for example, 1,000 shillings, and this machine is used up in 10 years, he adds 100 shillings annually to the price of the commodities, in order to be able after 10 years to replace the worn-out machine with a new one. In the same manner, the cost of production of simple labour-power must include the cost of propagation, by means of which the race of workers is enabled to multiply itself, and to replace worn-out workers with new ones. The wear and tear of the worker, therefore, is calculated in the same manner as the wear and tear of the machine.”

Dehumanization complete. According to Marx, the unskilled laborer is to the capitalist no more than a machine, to be depreciated, amortized, repaired, and finally replaced. If one had any doubt of Marx’s intentions, here they are on full display. That he lumps the proletariat as a “race” is of twofold aim: (1) to cause the unskilled laborer great angst for this divide, and (2) to stir superior feelings of pride for this race, as if an actual ethnic quantity, a real nationalism. This beaming pride in one’s own supposed exploitation, combined with a bias against those who would achieve higher than proletariat status, constitutes a type of reverse elitism, a hallmark of red philosophy (their elitist and fascist power structures notwithstanding).

Cries for “economic justice” are based upon this principle. Yet, they do not seek “justice” but a tribute for being unskilled, even proudly so. The redistribution of wealth towards those who have not achieved is not limited to helping widows and orphans, per scriptural commandment, but is for any who are below a certain level of means. Even here, however, there is not truth but only disguise and subterfuge. For the true underbelly of this beast is the destruction of the capitalist system which permits and spreads inequality. It is not reparations which are sought but permanent destruction of capitalist means. Accumulated wealth is to be spread in such a way that it no longer has power. Private property, the repository for accumulated wealth, shall be no more. There will no method by which capitalization is possible. It will be a permanent emasculation. The outcry for such redistribution derives from that aforementioned grievance, the supposed dehumanization of the unskilled laborer (proletariat), which in actuality is but pure coveting.

Naturally, in order to carry out such plans, it will be necessary for the communist to remove that protector of private property, the gun. This explains America’s resistance to communism. For it is not that Americans reject free handouts, personal bailouts, easy credit, or fiat currency, but only that the sheer number of small arms in private hands makes it impossible for those collectivists in power to collateralize its welfare state with private real estate. Simply, the Second Amendment has saved the United States from its complete implosion. Even one gun protecting private property makes it that much more difficult for the communist to seize property by force.

“Thus, the cost of production of simple labour-power amounts to the cost of the existence and propagation of the worker. The price of this cost of existence and propagation constitutes wages.”

The deeper meaning from Marx is that the capitalist system maintains as an incubator for unskilled labor. Wages are only high enough to promote subsistence, and therefore the children of such laborers, having no recourse to any higher learning or means to different venue, also fall prey to the same cycle. This is Marx’s universe of victimization. This does not preclude that entire families have never raised themselves above a certain low bar, or even that whole towns have remained in a type of economic grip. Nevertheless, it is not Marx’s purpose to fix such capitalistic excesses but to overthrow that system entirely. This shall ironically come by seizing the means of production so that the products and services which capitalism made ubiquitous, if not invented, will continue unabated! And in this utopia shall the existence of the worker, who shall still be a worker, become even more materialistic (though in reality no such thing has ever followed any proletariat revolution).

“The wages thus determined are called the minimum of wages. This minimum wage, like the determination of the price of commodities in general by cost of production, does not hold good for the single individual, but only for the race. Individual workers, indeed, millions of workers, do not receive enough to be able to exist and to propagate themselves; but the wages of the whole working class adjust themselves, within the limits of their fluctuations, to this minimum.”

Again, Marx invokes the pride of “race” as a means by which the working class, through some particular talent, or perhaps only by survival skill, shall overcome the nebulous evil of the “minimum wage.”

This minimum wage, already described by Marx as a level of subsistence exaggerated through a supply and demand mechanism, and also by some barrier against proletariat education or training, is a brief point of contention. For it is not truly wages which Marx seeks to reform but the idea of wages, that is, the idea of capitalist exploitation of labor. Wages are only the pivot point of current reality by which to generate hostility against it enough to smash it. What shall replace wages? “To each according to his needs...”

“Now that we have come to an understanding in regard to the most general laws which govern wages, as well as the price of every other commodity, we can examine our subject more particularly.”

The “understanding” is a communist one.

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