Tuesday, March 27, 2012

Lesson 26: Communist Economics 6: Relation of Labor to Capital

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Communist Economics

Part 6

Marx’s Wage-Labour and Capital:

Relation of Wage-Labour to Capital


What is it that takes place in the exchange between the capitalist and the wage-labourer? The labourer receives means of subsistence in exchange for his labour-power; the capitalist receives, in exchange for his means of subsistence, labour, the productive activity of the labourer, the creative force by which the worker not only replaces what he consumes, but also gives to the accumulated labour a greater value than it previously possessed.”

For our study, there are four points of interest: (1) the mechanics of “work,” (2) the transformational power of capitalism, (3) the attitude of the communist towards this capitalist power, and (4) the error of Marxian economics which underpins its fundamental weakness, in fact, corruption.

First, the mechanics of work is in barter. The laborer trades his energy, whether physical or mental (even if menial), for things of subsistence (food, water, shelter, fuel, forms of communication and transportation, clothing, and so forth), or an exchange method thereby (money). This work is necessary, whether one is a laborer, a capitalist, a farmer, a forager, or any other. Contrary to communist belief, the capitalist involves himself in risk, in entrepreneurial skills, in time investment, and in maintaining for the subsistence of his laborers, whether to keep them from malnutrition or from competing employers. It might be argued that some levels of capitalism, such as in banking, are less productive than those of pure labor, but the argument is meaningless. If the banker is extraneous, the marketplace of ideas will out that. It might be further argued that the capitalist system keeps the extraneous banker from marketplace obsolescence, essentially pillaring its own. This argument discounts that such pillaring is successful only if the marketplace accepts the concept of “banking.” Since the marketplace is in reality so disposed, there is little more to say on this but for an overall conspiracy. Now, it might be imagined that a banking consortium which controls the financial system of entire nations (that is, central banking) exists not from marketplace valuation, or perception thereof, but simply from a coerced method by which money is delivered to society. For example, it might be argued that the Federal Reserve of the United States is a beast which provides no benefit and sucks dry all labor, whether working class or capitalist. However, there are two counter-arguments of force: (1) that such central banking has provided through Keynesian capitalism (state capitalism) the means by which so many working class enjoy a relatively high lifestyle, and (2) that the marketplace has neither devised a better system of delivery for relatively high lifestyle nor embraced the antithetical communist lifestyle. Therefore, we know that in terms of work (exchanging labor for subsistence), central banking has expedited that which is both desired and “better.” This does not, however, excuse the excesses of central banking, including that of pilferage, manipulation of markets, exaggeration of boom-bust cycles, and government leverage.

Second, Marx has, wittingly or unwittingly, displayed the positive transformational power of capitalism, that is, “gives to the accumulated labour a greater value than it previously possessed.” When individualism is permitted by government, the creative natures of men are unleashed. When furthermore such creative natures are perpetuated through the legal defense of unique creations (through patents, copyrights, trademarks, etc), the result is the dispensation of invention upon mankind. Where capitalism thrives, these inventions become products, in time, as the cost of recapitalization is duly amortized, inexpensively distributed among the masses. There is, however, an important distinction between invention and product. When a man has an idea, or formulates a concept, but thereafter lets it remain hidden within the mind, or sequestered in secret papers, society partakes not. It is therefore that the acme of value in capitalism is the capitalist. For without the man of risk, of entrepreneurship, of dedication and determination, inventions remain novelties.

Third, Marx views and comments upon this transformational power of capitalism as something sinister, the exchange of labor for subsistence perceived to be and communicated as a form of slavery or ongoing trickery. Indeed, this thought process is essential for the communist, for only organized and national hatred against “exploitation of labor (the proletariat)” has the potential to upend capitalism. Thus, there is always a propaganda machine against capitalism. This does not ignore the favorable value of organized labor in successfully bringing to bear change against, say, unsafe practices, health menaces, or child labor. Nor does it ignore the more neutral aspects of wage and benefits negotiation. Yet, outside these realms for usefulness, organized labor is but an arm of communism, often banging a drum for wealth redistribution, at times provoking the dangerous general strike.

Fourth, Marx spouts an error which defies reason, calling labor “the creative force by which the worker not only replaces what he consumes.” This is incorrect. It is the capitalist who takes the relatively unformed and undirected energies of laborers, transforming these into powerful means of production and societal change. By implanting into the mind of the laborer that his labor is “creative,” Marx intends the capitalist to be expendable. However, without the capitalist, what is labor but a formless void? In fact, we know (clearly explicated in previous synopses) that it is the goal of communism to steal the means of capitalist production, not to create in the least any new type of facility, machinery, or even labor pool. That is, communism shall continue to utilize labor in the same uncreative manner, only with less reward for individual talent. Therefore, it is a false and manipulative flattery which Marx extends to that labor which is not creative.

“The labourer gets from the capitalist a portion of the existing means of subsistence. For what purpose do these means of subsistence serve him? For immediate consumption. But as soon as I consume means of subsistence, they are irrevocably lost to me, unless I employ the time during which these means sustain my life in producing new means of subsistence, in creating by my labour new values in place of the values lost in consumption. But it is just this noble reproductive power that the labourer surrenders to the capitalist in exchange for means of subsistence received. Consequently, he has lost it for himself.”

In locations where there exists no better means of subsistence, such work is by necessity (unless the society is not free, in which case it is slavery). Marx, however, ignores this necessity, focusing instead on an inequality, that the capitalist profits and amasses wealth while his laborers merely subsist.

Yet, the capitalist profits (and therefore subsists) by way of a relative genius in transforming unfocused labor into more valuable focused labor. In other words, it is a power of the brain, to conceive a better mousetrap, or better method to make a mousetrap, which profits. The communist, however, actually bemoans this “unfair” brainpower and profit thereof, labeling it as “exploitation” of the laborers employed. By such moaning, one should think the products and services of capitalism, those better mousetraps, to be without value, only existing to employ (or rather, exploit) laborers and to profit capitalists. This is the point. The communist cannot admit that capitalist goods and services have great value, not even by the perception of the marketplace, else the power to label those laborers as exploited (except under certain ruthless conditions) is lost. Nevertheless, by its written intention to seize the means of production, communism makes it known that capitalist goods and services do have great value.

Marx states also that the laborer, in surrendering himself to a never-ending cycle of labor-for-subsistence barter, “has lost it for himself.” Oddly, this is a statement of entrepreneurship! Yet, howbeit that the laborer should believe communism to endorse autonomy of the self, especially in financial terms, when such is not permitted for the capitalist? It is a lie of massive proportion.

“Let us take an example. For one shilling a labourer works all day long in the fields of a farmer, to whom he thus secures a return of two shillings. The farmer not only receives the replaced value which he has given to the day labourer, he has doubled it. Therefore, he has consumed the one shilling that he gave to the day labourer in a fruitful, productive manner. For the one shilling he has bought the labour-power of the day-labourer, which creates products of the soil of twice the value, and out of one shilling makes two. The day-labourer, on the contrary, receives in the place of his productive force, whose results he has just surrendered to the farmer, one shilling, which he exchanges for means of subsistence, which he consumes more or less quickly. The one shilling has therefore been consumed in a double manner – reproductively for the capitalist, for it has been exchanged for labour-power, which brought forth two shillings; unproductively for the worker, for it has been exchanged for means of subsistence which are lost for ever, and whose value he can obtain again only by repeating the same exchange with the farmer.”

This illustration omits the key point, that the labor of the day-laborer is unfocused energy, having no wage value at all, until the farmer gives it wage value through employment. That is, the day-laborer, sitting idle, collects no wage at all, his energy wasted (as it were). Only when the capitalist (here, the farmer) puts that energy to use is the mechanism of work engaged, labor being exchanged for subsistence. Therefore, it is not that the day-laborer in employment to the farmer has worked for half his value, or that the farmer has collected a full wage (being in this example equal to that of the day-laborer) for no work at all. Instead, both the farmer and day-laborer having needs, make a contract of honor, one to labor, one to pay for labor. The need of the farmer is implicit, in that he ostensibly cannot complete his tasks without the labor of the day-laborer. The need of the day-laborer is intrinsic, for he must subsist. The contract between them, being of necessity and honorable, is therefore no other man’s business.

Further, what shall we say of the money which is paid to the day-laborer? Where did the farmer get this money? Did he earn it? Steal it? Inherit it? Receive it from the central bank for nothing? Irrespective of source, the farmer is putting his own money (arguments of merit or morality notwithstanding) at risk by paying the day-laborer for his labor. What if the farmer decided to forego hiring the day-laborer, instead working himself in exchange for the right to retain his own capital for other times? In such case, the day-laborer is not “exploited” but neither does he subsist.

Thereby, whether the farmer hires or does not hire the day-laborer, the communist does not approve. If the day-laborer is hired, he is exploited. If the day-laborer is not hired, the farmer is heartless and greedy. Under such communist scrutiny, the capitalist farmer cannot win. Again, that is the point. The Hegelian dialectic employed for such argumentation is not designed for reason or compromise, only for dynamic movement to a synthesis. The farmer (capitalist) will always be the Oppressor, the day-laborer (proletariat) always the Victim, and communism always the Savior.

Marx also commits fraud, for he makes it that if the day-laborer had no immediate need for subsistence he might strike out on his own. This is presumptuous, for it not only assumes that the brainpower or gumption of every man is the same, but it also denies the right of the day-laborer to be a day-laborer, making it a derision. Perhaps some wish to be day-laborers!

Supposing, however, that a particular day-laborer does strike out on his own, and thereafter becomes a farmer with need for his own day laborers. Shall the communist then deem it unholy for that day-laborer-cum-farmer (beloved to this point by Marx) to become a hirer of day-laborers? If so, Marx is a liar, creating the fantasy that a day-laborer may become whatever he so desires. If not, Marx is a capitalist.

“Capital therefore presupposes wage-labour; wage-labour presupposes capital. They condition each other; each brings the other into existence.”

These preconditions of Marxian economics are somewhat foolish. First, an accumulation of wealth (capital) presupposes neither wage-labor to amass such wealth nor a waiting body of laborers to employ such wealth. For example, agricultural excess is not necessarily due to the labor of day-laborers, nor is agricultural excess existent based on any future day-labor. Marx here is caressing the strings of communism, serenading the working class with a song of outrage, that wealth exists at the expense of labor, or, more nearly, at the presumption of such expense. That is, capital is arrogant. Second, wage-labor is not predicated on capital. Using again the agricultural example, a day-laborer may work for a portion of that which he harvests, not for any pre-existing capital wealth. It might be argued that such is commission work, not day-labor, but this argument only pretends purity. In fact, day-laborers may work not for either wage or commission but instead for pure barter, such as room and board. Against this, the argument may be that room and board constitutes wage, but – ah! – it is not a redistribution of wealth.

The overarching argument is that commission and barter (such as room and board) comprise but few of the employer-employee relationships. However, this is a function of the marketplace, for the wage-laborer is, bluntly, the least ambitious laborer, the commission worker being of more confidence, the barter worker being of fewer material needs.

In essence, Marx has only administered the communist dialectic, to begin the argument, not to win it.

“Does a worker in a cotton factory produce only cotton? No. He produces capital. He produces values which serve anew to command his work and to create by means of it new values.”

More dialectic concerning unfairness and capitalistic hardheartedness. Again, this neglects that an idle laborer is paid nothing!

“Capital can multiply itself only by exchanging itself for labour-power, by calling wage-labour into life.”

Yes, capital can multiply itself this way, but not only this way. For example, the power of agriculture may cause capital to multiply itself, even without labor-power. The power of investment, whether in real estate or any other vehicle, may do likewise. It might be argued that such exceptions are extensions of labor-power exchange, but this addresses not the so-called exploitation of labor. For if an investment becomes more valuable due to an increase in buyers for that investment, this denotes, if not necessitates, some commensurate increase elsewhere.

But if one asks where this commensurate increase originates, the current state of capitalism must not be excluded for the sake of historical connection with Marx. Specifically, the increase so mentioned may be in credit, such as in the ability to mortgage one’s home in order to fund a start-up business. One might say that mortgages are enslavement to banking, an exchange of future labor-power for current capital, but this ignores the positive aspects of such capitalization, including freedom from wage-labor per se, even the possibility of full “financial freedom.”

“The labour-power of the wage-labourer can exchange itself for capital only by increasing capital, by strengthening that very power whose slave it is. Increase of capital, therefore, is increase of the proletariat, i.e., of the working class.”

True, the wage-laborer is, more than all others, a “slave” to his employer. This is, however, a reflection of both societal needs and innate brainpower. Simply, capitalists desire wage-laborers, and many people are happy enough to be wage-laborers. In this, there is no wrongdoing if both sides are fairly treated, according to their contracts made. The power of the labor union has, in fact, made the wage-laborer at various times quite respected. For many decades, the American auto worker, with his generous wage and benefits package, was the envy of the working class.

That wage-labor creates more capital, and therefore more proletariat, is in many cases an improvement for that proletariat. Where there is corruption, however, the proletariat requires to still organize for basic dignity. But where there is prosperity and, in the main, fairness, this Marxian diatribe only creates envy and class warfare. This is, of course, the point, for communism seeks not to reform capitalism but to destroy it.

“And so, the bourgeoisie and its economists maintain that the interest of the capitalist and of the labourer is the same. And in fact, so they are! The worker perishes if capital does not keep him busy. Capital perishes if it does not exploit labour-power, which, in order to exploit, it must buy. The more quickly the capital destined for production – the productive capital – increases, the more prosperous industry is, the more the bourgeoisie enriches itself, the better business gets, so many more workers does the capitalist need, so much the dearer does the worker sell himself. The fastest possible growth of productive capital is, therefore, the indispensable condition for a tolerable life to the labourer.”

Marx has confessed some truth, that the most expedient factor for successful capitalism is the happy laborer. The more success, the more happy laborers. This seems nearly ideal. Yet as we know, communism does not exist to laud capitalism but to bury it. The happy laborer is not to Marx a positive, but is instead a sign that capitalism has bought the soul of the working class.

“But what is growth of productive capital? Growth of the power of accumulated labour over living labour; growth of the rule of the bourgeoisie over the working class. When wage-labour produces the alien wealth dominating it, the power hostile to it, capital, there flow back to it its means of employment – i.e., its means of subsistence, under the condition that it again become a part of capital, that is become again the lever whereby capital is to be forced into an accelerated expansive movement.”

According to Marx, industrial progress is not the manner by which the proletariat rise but rather are ground down. Under communism, the proletariat are, per Marx, without goals, without brainpower, without heart, without ambition. Marx furthermore excludes any possibility that the wage-laborer might change his circumstances by saving wages for capital, or by jumping to commission work, or by moving to a different location, and so forth. Yet, if the wage-laborer is without such talents or skills, ought not he be content rather than malcontent? Not so for the communist, who heckles the wage-laborer into resenting his employment, encouraging an entire overthrow of the capitalist system, which is to be replaced with... those same means of production, only under communism!

“To say that the interests of capital and the interests of the workers are identical, signifies only this: that capital and wage-labour are two sides of one and the same relation. The one conditions the other in the same way that the usurer and the borrower condition each other.”

Note the bloodsucking relationship Marx draws between capitalist/laborer and usurer/borrower. This is intentional, to stoke the coals of hatred and envy. But there also is a deeper meaning, for the “usurers” were and are, according to European thinking, the Jews. This planted seed from Marx is meant to cause umbrage against the Jews but also, more to the point, against Judaism, specifically against the Law of God (Torah), that protector of Life, Liberty, and Private Property.

“As long as the wage-labourer remains a wage-labourer, his lot is dependent upon capital. That is what the boasted community of interests between worker and capitalists amounts to.”

The wage-laborers, that endless pool of the working class, who refresh daily with youthful recruits, and who maintain by their own limitations, are by Marx poked constantly. Remarkably, many proletariat respond favorably to the communist jabs, seeing such as alarm bells. But what has been achieved by this awakening? For the wage-laborer, it is a net negative, the former bliss becoming resentment towards his employer, or envy against his neighbor’s wealth (capital). One might argue that awake is better than asleep, but to what end? The communist endgame is merely to utilize the laborer under a different guise, promising met needs in exchange for allegiance. Is communism capable to do this? The rhetoric is that communism trumps capitalism by relieving short economics, that is, by removing the anxiety of the poor. The ideology, however, cannot justify such rhetoric. Further, the reality for every nation embracing this communist ideology has not been relief, but instead quite the opposite.

“If capital grows, the mass of wage-labour grows, the number of wage-workers increases; in a word, the sway of capital extends over a greater mass of individuals.”

This capitalist “sway” has in times past been a blessing, but sometimes has run amok in corruption. Nevertheless, collectivism has most often (if not always) been multiple times worse than the excesses of individualist capitalism.

“Let us suppose the most favorable case: if productive capital grows, the demand for labour grows. It therefore increases the price of labour-power, wages.”

“A house may be large or small; as long as the neighboring houses are likewise small, it satisfies all social requirement for a residence. But let there arise next to the little house a palace, and the little house shrinks to a hut. The little house now makes it clear that its inmate has no social position at all to maintain, or but a very insignificant one; and however high it may shoot up in the course of civilization, if the neighboring palace rises in equal or even in greater measure, the occupant of the relatively little house will always find himself more uncomfortable, more dissatisfied, more cramped within his four walls.”

And so Marx, with no particular place to go economically, resorts to that moralistic argument. Capitalism paves the way for success which may provoke envy, and therefore Marx means it to be the mechanism for social unrest. But the size of one’s home is not the ultimate fount of inner peace or happiness. If one is therefore “more uncomfortable, more dissatisfied, more cramped,” it is not the relative size of the neighbor’s house which causes such angst and resentment, but it is corruption of the soul.

This brings us to God’s Law (Torah). It is sin to covet your neighbor’s house, to desire (1) to take that house from that neighbor (“I must have your property”), or (2) to destroy that neighbor’s house (“If I can’t have it, neither can you”). It is plotting to steal. Marx teaches against God’s Law, which is the same as teaching to sin. According to Christ, such teaching makes a person to be called “least” (Matthew 5:19).

Keep in mind, however, that Marx utilizes dialectic to start a discourse against Torah, the aim (synthesis) being to destroy morality. Once morality is destroyed, God can then be supplanted. The matter of faith is insignificant in relation to this, for once the state creates the ultimate rules for fair play, that is, moral law, the state is in fact a god.

“An appreciable rise in wages presupposes a rapid growth of productive capital. Rapid growth of productive capital calls forth just as rapid a growth of wealth, of luxury, of social needs and social pleasures. Therefore, although the pleasures of the labourer have increased, the social gratification which they afford has fallen in comparison with the increased pleasures of the capitalist, which are inaccessible to the worker, in comparison with the stage of development of society in general. Our wants and pleasures have their origin in society; we therefore measure them in relation to society; we do not measure them in relation to the objects which serve for their gratification. Since they are of a social nature, they are of a relative nature.”

Marx, still away from economics, moves from argument of morality to one of sociology. While acknowledging that “all boats rise” during economic good times, Marx nevertheless notes a distracting difference between the big boats and the small ones. Rather than focus upon the positive of increasing lifestyle and more humane conditions for all, he inhibits pleasure by pointing to the “pain” of having a smaller measure of good things. This is not an uncommon or unknown complaint, for many are jealous of their portion, even if all other things be equal. Marx takes this to its ultimate communist conclusion, however, that jealousy towards apportionment is natural, for “our wants and pleasures have their origin in society; we therefore measure them in relation to society; we do not measure them in relation to the objects which serve for their gratification.”

In essence, society, the superstructure, is blamed. According to communism, it is religion (that is, Torah) and the family, main beams of the capitalist superstructure, which particularly must be held accountable for stirring up the natural tendencies of men to covet. The implication is that under communism, coveting disappears. That is, without morality comes superior morality!

“But wages are not at all determined merely by the sum of commodities for which they may be exchanged. Other factors enter into the problem. What the workers directly receive for their labour-power is a certain sum of money. Are wages determined merely by this money price?”

Marx returns abruptly from morality and sociology.

“In the 16th century, the gold and silver circulation in Europe increased in consequence of the discovery of richer and more easily worked mines in America. The value of gold and silver, therefore, fell in relation to other commodities. The workers received the same amount of coined silver for their labour-power as before. The money price of their work remained the same, and yet their wages had fallen, for in exchange for the same amount of silver they obtained a smaller amount of other commodities. This was one of the circumstances which furthered the growth of capital, the rise of the bourgeoisie, in the 18th century.”

First, those laborers who chose to stay with mining rather than jumping to, for example, agriculture, ought not be viewed as exploited but rather as working within the limits of both their talents and circumstances.

Second, as mining became affected, those metallic commodities became of lesser “value” than before, and capitalist investors therein, whether principals or investors, took a loss of “wage” equal to or greater than that of the laborer.

It might be argued that such miners, though paid, were no more than slaves. If so, they were slaves of totalitarianism, not capitalism, which only exists under freedom and fairness. For where true capitalism ends, tyranny begins.

“Let us take another case. In the winter of 1847, in consequence of bad harvest, the most indispensable means of subsistence – grains, meat, butter, cheese, etc. – rose greatly in price. Let us suppose that the workers still received the same sum of money for their labour-power as before. Did not their wages fall? To be sure. For the same money they received in exchange less bread, meat, etc. Their wages fell, not because the value of silver was less, but because the value of the means of subsistence had increased.”

This seemingly credible argument has many flaws. First, whether under communism or capitalism, the harvest would have been “bad.” Second, the price of subsistence (inflation) rises in accord with the needs of the producer, in this case the farmer. For if the harvest is bad, the farmer must, in order to keep his farm financially viable, raise his prices on that which he has to offer. If the argument is that the farmer should bear this brunt also, it follows that a central authority must be established to force the farmer into such an agreement. Otherwise, the farmer may as well retain his crop for himself. Third, a severe rise in the price of subsistence can only be alleviated by central authority (communism) or by charity (Torah). Since capitalism supposedly is the cause for all inflation, the Marxian ploy here is to present communism as the only reasonable option. Fourth, if the price of subsistence rises, is it not that certain segments of society benefit? For example, though the retailer makes but little profit on his meats, is he not still profiting, and will not his profit purchase more goods once prices alleviate? This is the true nature of capital, that it fluctuates in stature, and therefore has dynamic power to flow through society, strengthening or weakening as it goes. This dynamism motivates creative productivity, for the entrepreneur has optimism that his capital will not only increase but also gain buying power during particular times. In contrast, the “idealized” communist state can never motivate anyone, being a static mass of equations, that one bushel of wheat equals a particular amount of corn, and so forth. This type of fixed pricing disregards supply and demand. The actual communist state, on the other hand, does regard supply and demand, especially that which affects their central command!

“Finally, let us suppose that the money price of labour-power remained the same, while all agricultural and manufactured commodities had fallen in price because of the employment of new machines, of favorable seasons, etc. For the same money the workers could now buy more commodities of all kinds. Their wages have therefore risen, just because their money value has not changed.”

When prices fall due to some favorable condition, it is the nature of competition more so than demand. As such, lower prices beget even lower prices. The marketplace steadies such fluctuations by default. Buyers gravitate to price and quality, choosing winners and losers. Eventually, those business entities which cannot survive lower pricing must fold, and therefore the unemployed pool grows. Necessarily, this loss of competition levels pricing also, and therefore the good times of relative low prices eventually come to an end.

Marx makes it appear, however, that such wonderful conditions may under communism continue unabated. This is untrue for two reasons: (1) communism has no place for competition, and therefore recognizes no such thing as “low” pricing, and (2) communism is not concerned with wages, and therefore “buying power” is just a lollipop fantasy under that system.

“The money price of labour-power, the nominal wages, do not therefore coincide with the actual or real wages – i.e., with the amount of commodities which are actually given in exchange for the wages. If then we speak of a rise or fall of wages, we have to keep in mind not only the money price of labour-power, the nominal wages, but also the real wages.”

Communism has no goal to reform capitalism. This therefore is only dialectic.

“But neither the nominal wages – i.e., the amount of money for which the labourer sells himself to the capitalist – nor the real wages – i.e., the amount of commodities which he can buy for this money – exhausts the relations which are comprehended in the term wages. Wages are determined above all by their relations to the gain, the profit, of the capitalist. In other words, wages are a proportionate, relative quantity.”

Marx makes three points here: (1) that “nominal” wages include a loss of self-worth, (2) that “real wages” include a loss of buying power, and (3) that “relative” wages are disproportionate in relation to profit.

What is a proportionate and proper relative wage?

Supposing a capitalist hires four laborers at $30,000 gross per year each, and profits himself at $90,000 gross (after recapitalization and other business expenses). What if the capitalist were forced to share his “excess” ($60,000) among the five (including himself)? Each laborer would receive an extra $12,000 (60,000 divided by 5), bringing each total to $42,000. In theory, this seems quite equitable. In reality, there are numerous problems. First and foremost, what motivates to keep the capitalist in business? If his goal is $90,000 and he meets it, he is satisfied. If he reaches only $42,000, the capitalist is neither happy nor driven. Thereby, the business may be abandoned, the capitalist retreating to some other venture, or perhaps to wage-labor himself. If so, his laborers are now unemployed. This benefits no one.

Let’s look at a more skewed example. Supposing a CEO for a multinational corporation receives $12M (million) per year. Should instead he receive some different arbitrary amount, say, $5M, and the remaining $7M be distributed amongst the corporate employees? If so, who makes such a decision? If the answer to this is “the corporation,” why should the CEO not receive $12M? If the answer is instead “society,” what does that mean? Will a pamphlet of such standards be published? Who will decide the standard? Eventually, this devolves down that a small elite shall set wage levels for all. This is fascism.

Communism takes a more drastic view. The CEO is considered superfluous, so he receives nothing. He is replaced by a committee. These committee members are, of course, a bit more privileged than the average comrade, and therefore will receive a certain amount more ration than their laborer counterparts. But what is a committee? Is it not a board of directors? Who then is head? If nobody, what are the rules of the committee? Who makes these rules? In this regard, communism can be no more than a more pointed and dangerous form of corporatism, the CEO a tyrant who makes himself to appear benevolent (and furthermore expects such due praise). He is “dear leader” and is, essentially, a god.

If there is a moral here, it is that inequality under capitalism is far preferable to “equality” under communism.

“Real wages express the price of labour-power in relation to the price of commodities; relative wages, on the other hand, express the share of immediate labour in the value newly created by it, in relation to the share of it which falls to accumulated labour, to capital.”

According to Marx, “real wages” are an indicator of buying power. This simply means one’s wages look better when goods and services cost less, and look worse when goods and services cost more. Necessarily, this perception is relative to the level of one’s actual lifestyle, but also is enabled further by the level of lifestyle one desires. Since such perception is possible only under capitalism, the solution from Marx is to obliterate the capitalist marketplace. Under communism, envy and anxiety would thus be absent, replaced by across-the-board mediocrity. This is imagined to be appealing.

“Relative wages” are, Marx asserts, a percentage of labor wage-plus-capitalist profit. If you earn $10 per hour, but the boss earns $20 per hour, you have sold yourself for 33% of your value. Naturally, this excludes the idea that the boss should make anything at all. If, however, the boss is included as a productive worker, his “share” being also, under communist thought, $10 per hour, the relative wage is now calculated as 50%.

We come now to the punch line, namely, that these Marxian formulae and pontifications are all but mere dialectic. For it is not that communism demands the removal of capital profit for the equalization of wages, but rather for the destruction of wealth accumulation, that is, of capital, or, private property. This is the primary and cardinal ordinance of communism, never to be forgotten in discussion with any socialist or communist.

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