Profit, Wages, and the Human Good

In his work What is Property? Pierre-Joseph Proudhon famously declares that “property is theft.”[1] In particular, Proudhon has in mind the products of labor, which, under capitalism, the worker produces but does not own. Nor can she afford to buy them, Proudhon says, “Because the right of increase does not permit these things to be sold at the cost-price, which is all that laborers can afford to pay.”[2]

In a capitalist system, the means of production (i.e., land, factories, tools and machinery, as well as stocks and bonds, etc.) are privately owned in order to maximize profit (and these privately owned means of production are what we refer to as “private property”). Workers are hired to produce with these means of production commodities that can be sold on the market. In order to ensure profit, these products must be sold for more than the cost of producing them. Furthermore, most of this consequent surplus value does not go to the workers but rather to those who own the means of production. A fraction of surplus value is then returned to the workers in the form of wage.

What this means is that, quite literally, the value produced in the workers’ labor is stolen from them and only partially returned (an objection which, as it happens, sounds rather similar to capitalist anti-taxation arguments). And the owners have a vested interest in keeping the workers’ wages as low as possible, so that profit is maximized as much as possible. As Milton Friedman insists, businesses have no social responsibility whatsoever other than the maximization of profit.[3]

Karl Marx writes in the Economic and Philosophic Manuscripts of 1844:

For [political economy], therefore, the worker’s needs are but the one need – to maintain him while he is working insofar as may be necessary to prevent the race of laborers from dying out. The wages of labor have thus exactly the same significance as the maintenance and servicing of any other productive instrument . . . Wages, therefore, belong to capital’s and the capitalist’s necessary costs, and must not exceed the bounds of this necessity.[4]

In other words, wages, according to Marx, are literally a maintenance fee.

Human beings are seen (whether implicitly or explicitly) solely in terms of potential profit. Unemployed persons, then, are not producing profit and therefore needn’t be afforded the maintenance fees of wages. Capitalism, in other words, annihilates the possibility of thinking of persons or things as intrinsically valuable – all value is externalized and measured against capital, which is the sole and absolute measure of value.

This is readily apparent when we consider the fact that we must purchase the things that keep us alive (i.e., food, shelter, healthcare, etc.) – which is to say that our very lives are commodities to be purchased. And the only way that we can afford to do this – speaking in the hypothetical absence of a welfare state, which is continually derided as “socialist” and therefore fundamentally anti-capitalist – is if we have jobs, which is to say if we are producing value. And “value,” of course, means capital. If I am not profitable to the capitalist, then I have no standing in relation to capital, the absolute measure of value. And, therefore, quite literally, I have no value and do not “deserve” food, shelter, healthcare, etc. Marx is once again helpful on this issue: “The worker exists as a worker only when he exists for himself as capital; and he exists as capital only when some capital exists for him. The existence of capital is his existence; his life[.]”[5]

What is often forgotten, it seems, is that it was anarchists, socialists, and other labor activists who were fighting against capitalists in favor of such basic worker protections as an eight-hour day, forty-hour week, minimum wage, and child labor laws. All of these cut into profits, and, furthermore, in the case of unskilled labor, if one worker demands a living wage, the capitalist can fire the worker and have a new one, who is willing to work for low wages, hired and trained by the end of the day. Workers are utterly expendable and, as human beings, have no value in and of themselves. Their value is literally a question of how much profit they bring to the capitalists.

On its own, capitalism ignores externalities, such as damage to the environment or the implications for the well-being of society. Frans de Waal points out another telling quotation from Milton Friedman, who says, “few trends could so very undermine the foundations of our free society as the acceptance by corporate officials of a social responsibility other than to make as much money for their stockholders as possible.”[6]

As social creatures, our well-being as individuals directly correlates to the well-being of the whole. We are not atomistic individuals who make totally free, totally isolated market choices, which have no effect on society as a whole (an assumption upon which capitalism, as a product of Enlightenment thought, rests). Individual choices have implications for society at large. It’s no mystery why societies in which everyone has access to the basic necessities of food, healthcare, and education are generally happier, healthier, and safer.

I’m not talking about utopia. I’m not saying all our problems will be solved if we just tax the rich a little more and redistribute wealth more equally. I’m talking about how to make things better. Hell, it doesn’t take a rocket scientist to figure out that healthy, happy, and safe workers are better workers. True, ensuring this might cost more in the short-term, but if capitalism were capable of considering long-term impacts – which, granted, I don’t really think it is or ever will be – then increased worker protection and social welfare would be a no-brainer. To be sure, this is an argument for what I take to be a relatively morally neutral “Enlightened Self-Interest” (i.e., I do what’s good for others because it is also what’s good for me), but it’s a hell of a lot better than the straightforward egoism of free market capitalism.

Ann Jones recently published an article in which she praises the social-democratic system of Norway. Now, again, I’m no social democrat (I’m much more strongly anti-capitalist than that), but I do think that Jones makes some important points regarding the superiority of a system that protects more than just the profitability of corporations. She writes, for example:

In the Nordic countries, on the other hand, democratically elected governments give their populations freedom from the market by using capitalism as a tool to benefit everyone. That liberates their people from the tyranny of the mighty profit motive that warps so many American lives, leaving them freer to follow their own dreams—to become poets or philosophers, bartenders or business owners, as they please.

Putting aside the question of whether and to what extent this truly happens in Norway (I’m not the one to ask), Jones is making a point here that I have often tried to make before: The world needs folks who are doing what they are passionate about. Why? Well, for one thing, there is the Enlightened Self-Interest argument that folks who are passionate about what they are doing will obviously do better than folks who are not, and that excellent work will benefit society as a whole.

Another angle on this is that it helps reaffirm the inherent value of work. Socialism is often misunderstood as the position that it doesn’t matter how much work you do, you should still be paid the same at the end of the day. Putting aside the fact that the presence of any form of monetary remuneration is altogether rejected by many socialists, this is not quite the argument.

Marx, for example, made a point of arguing that human beings need meaningful labor, but that capitalism denies most of us this basic human good – something like 80% of Americans hate their jobs – in the name of greater circulation of cheap commodities (implying that “freedom” is fundamentally “freedom to consume”). Labor has become totally instrumentalized – a mere means to the end of having food to eat. Socialism, then, wants to reclaim the inherent value and goodness of labor.

For some socialists, such as communists, this may indeed mean the total abolition of any and all forms of currency and remuneration. For others, such as collectivists, a labor theory of value (i.e., the value of a product is determined on the basis of the labor required to make it) would guide a labor note system, wherein remuneration would be relative to one’s work, but with the crucial difference from capitalist forms of remuneration that the inherent value of life and labor would be affirmed such that even those who do less skilled or less dangerous forms of work would have their needs met just because they are human beings and as such do not need to “earn” the “right” to live.

The capitalist threat of destitution may ensure that most of us work, but work at what? Convincing people to buy cheap clothes they don’t need made by slave children in Bangladesh? Knowingly selling electronics – also made by slaves – that are intended to break in three years to ensure the next model sells? Selling fast food products that are ridiculously unhealthy? What social goods are being promoted with these kinds of jobs? And yet, these are the kinds of jobs that low-wage workers typically have. Do we really need to make sure this kind of labor endures? Just because consumers have been manipulated by advertisements into providing “demand” for these “services”?

Individual persons do not exist in vacuums and neither, by extension, do their market choices. We need to recognize ourselves as intimately bound up with the social whole. Noam Chomsky enquires after the human good in his most recent publication, and ultimately argues that a form of libertarian socialism is the answer. I am inclined to agree, but I do not claim to know. I’m not interested in drawing up blueprints for the perfect society of the future. I’m interested in how well we look after each other right now, and I have to say, free market capitalism seems to me to be one of the worst ways of doing so.

As I’ve argued before, capitalism is inherently and necessarily plutocratic, and therefore anti-democratic by its very nature. Socialism, on the other hand, is not only the position that we need democracy, but that democracy should go all the way down into the workplace, where the wheels of society truly turn. Accordingly, if we want democracy, we need socialism.


 

Notes

[1] Pierre-Joseph Proudhon, from What is Property?, in Anarchism: A Documentary History of Libertarian Ideas, Volume One: From Anarchy to Anarchism (300CE to 1939), edited by Robert Graham, (Montreal/New York/London: Black Rose Books, 2005), 34.

[2] Ibid., 35.

[3] Milton Friedman, “The Social Responsibility of Business is to Increase Profit,” The New York Times Magazine, 13 September 1970, available from: http://www.colorado.edu/studentgroups/libertarians/issues/friedman-soc-resp-business.html.

[4] Karl Marx, Economic and Philosophic Manuscripts of 1844, trans. Martin Milligan (Amherst: Prometheus Books, 1988), 86.

[5] Ibid.

[6] Frans de Waal, The Age of Empathy: Nature’s Lessons for a Kinder Society, (Three Rivers Press: New York, 2009), 38.

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Notes On Anarchism: Are People Inherently Good or Bad?

Apparently, my ongoing–albeit intermittent–“Notes On Anarchism” series has morphed into a way to (attempt to) briefly and succinctly respond to frequently asked questions regarding anarchism (and socialism more generally).

Thus, today I am taking up the annoyingly common objection that, because man (it is always man–I suppose the jury is still out on woman) is inherently evil, socialism (especially libertarian socialism) could never work, because man [sic!] would have to be inherently good. Therefore, it is concluded, the state is necessary and capitalism is our best bet economically.

What I find particularly odd about this objection is that it seems to be essentially saying that, because humans are inherently evil, we should–indeed, we must–build an economic system that encourages greed, selfishness, and the valuing of profit above all else (i.e., capitalism); and that, furthermore, we should give some of these inherently evil people a monopoly of force over the rest of society. If it is true that humans are inherently evil, this hardly seems like a solution.

Secondly, the “inherently evil”-“inherently good” dichotomy is, in my opinion, a red herring. Why does it have to be one or the other? Why do people always say to me, “Well, either you believe people are inherently good or you believe that people are inherently evil.” My question is: Why should we assume that people are inherently anything? This thinking strikes me as incredibly reductionistic, and I have addressed it in further detail, spelling out what I take to be serious problems with the idea of “human nature” here.

Now, to be clear, I do believe that empathy and mutual aid are an “inherent” (if we must use that word) aspect of the human species, developed over the course of evolution and without which we would never have survived. I absolutely believe that humans are social creatures and that if anarchy (in the pejorative sense) were to prevail, most of us would probably not run around killing, raping, and pillaging (and if the threat of the state’s use of force is the only thing that prevents you from doing so, I don’t think I want to hang out with you.) There is, to my mind, plenty of good and convincing evidence for all of this. Why, for example, is the lack of empathy (i.e., psychopathy) considered psychologically aberrant? Why is it so damaging for soldiers who experience firsthand the ravages of war? Why do babies who aren’t held enough often become psychopaths? Because we are social creatures!

The principles of “rugged individualism” and Social Darwinism still enjoy a considerable amount of prominence among right-wing politicians, but, quite simply, I think the evidence is completely and utterly lacking that these ideas come anywhere near accurately describing the human species and how we relate to one another. I have written on this in more detail before as well.

So, no, I don’t think people are “inherently good”, but I also don’t think people are “inherently evil.” Such reductionistic categories ignore perfectly good evidence to the contrary, as well as encourage vacuous thinking when approaching social and political problems. (I.e., “There is a lot of crime, which obviously just means that people are inherently evil”, rather than, “There is a lot of crime; why might that be? What social, political, economic, or other forms of power relations might be contributing to that?” To say nothing of asking what the historical evolution is of such ideas as “human nature”, what kinds of social and historical contingencies surrounded and contributed to the development of those ideas, how one’s own social and cultural background might be contributing to one’s adherence to these types of ideas, etc. etc.)

Social and political issues are incredibly complex, and, as is clear to anyone who is actually interested enough to do a minimal investigation into the political philosophies of socialism and anarchism rather than just assaulting us with right-wing talking points (if the reader will forgive a brief lapse into cynicism), anarchism and socialism attempt to address these issues with respect for their complexity. Anarchists do not deny that people do bad things, and that they would continue to do bad things in an anarchist society. However, anarchists also believe that there are many, many ways in which current structures–the state and capitalism chief among them–which serve to exacerbate these problems, often to an extreme degree. Capitalism, for example, must discourage and suppress sentiments of collectivity and communality among the working classes, as such sentiments encourage people to work together for mutual benefit rather than for the profit of their capitalist bosses. It is therefore in no way surprising that Milton Friedman said that “few trends could so very undermine the foundations of our free society as the acceptance by corporate officials of a social responsibility other than to make as much money for their stockholders as possible.”

On Libertarian Socialism, Anarchist Communism, and Other Such Absurdities

There was a great post today on Koinonia Revolution called “Socialism and Communism: The Last 100 Years“, dealing with the demonization of socialism and communism.  Since this is a conversation I have had many times, I thought I’d thrown in my two cents on the common misunderstandings and subsequent misuses of terms such as socialism, communism, and anarchism.

When asked about my political views, if I have the time, I might describe myself as a libertarian socialist who is particularly sympathetic to anarcho-communism.  Otherwise, I will probably just say I’m an anarchist.  But even this term can be problematic.  Indeed, as soon as I start throwing out terms such as “socialist”, “communist”, “anarchist”, and “libertarian”, I am likely to be misunderstood–and even more so when I suggest that there is some meaningful political philosophy that is actually characterized by a commitment to the basic ideas of all of these terms.

In general, “libertarianism” is taken to refer to the free market, minimum government ideas of thinkers such as Ron Paul; socialism is a catch-all term for any left-winger who advocates “big government”; “communism” is the horrible evil of the USSR; and “anarchism” would mean the abolition of all government, order, organization, etc.  Therefore, it is assumed, it is surely impossible that any of these terms could agree in any meaningful way with the other.

On the contrary, as I point out in the “Terminology” section above, socialism is an economic theory that, quite simply, refers to the collective ownership of the means of production.  There is no specific role of the state that is necessary to socialism–the state could be gigantic or non-existent.  Communism, furthermore, is a socialist economic theory, which generally refers to a specific way of structuring a socialist society around the idea of “from each according to her abilities; to each according to her needs.”  Again, no specific state role is necessary for this definition.  Anarchism also goes back to 19th century socialism: It simply refers to a type of socialism that is characterized by a non-hierarchical society (i.e., no state).  And finally, libertarianism was originally used as a synonym for anarchism.  So, in other words, libertarianism is anarchism; anarchism is socialism; communism is socialism; and socialism does not refer necessitate an authoritarian state.

For this reason, it is, historically speaking, more of a redundancy to speak of “libertarian socialism”.  It was not until the mid-20th century that the term libertarian began to be used to refer to laissez-faire economics, even though up until that point libertarians (i.e., anarchists) had always been characterized by an opposition to capitalism.  And similarly, it wasn’t until certain authoritarian regimes (i.e., the USSR, North Korea, etc.) arose as nominally “communist” that communism came to be demonized in American media.  But, as I have suggested, an authoritarian state is not the condition of possibility for socialism.  In fact, Noam Chomsky has argued (I think rightly), that the original definition of socialism is incompatible with an authoritarian state, which would mean that such states as have historically called themselves “communist” were in fact simply authoritarian and nothing more.

In Response to “What Bible is Pope Francis Reading?”

Just for kicks, I thought I would throw off the more serious, scholarly-ambitions tone of most of my blog entires to write a brief response to a truly asinine article I recently read entitled, “What Bible is Pope Francis Reading?” wherein the author argues that Jesus was a capitalist.  Putting aside that this is rather anachronistic (the type of Enlightenment individualism championed by capitalist economists didn’t really exist until, well, the Enlightenment) (I), and not wanting to introduce my own anachronism, I tend the think that Jesus, as presented in the Gospels, appears to have been pretty antiauthoritarian and pro-egalitarian (not to mention pro-altruism), which would put him at odds with the hierarchical, pro-greed, pro-inequality nature of modern capitalist economic theory.

To begin, the author writes:

The misconception that Jesus’ message is anti-capitalist probably stems from the same confusion that pervades all leftist thinking: the inability to distinguish voluntary from coerced human action. Jesus often exhorts his followers to voluntarily give to the poor. Nowhere in the gospels does he suggest that the Romans or the vassal Jewish government should be empowered to tax the wealthy to provide for the poor.

Actually, I would argue that said failure to distinguish voluntary from coerced human action falls in the capitalist camp.  As I’ve quoted Bakunin before:

The worker always has the right to leave his employer, but has he the means to do so? And if he does quit him, is it in order to lead a free existence, in which he will have no master but himself? No, he does it in order to sell himself to another employer. He is driven to it by the same hunger which forced him to sell himself to the first employer. Thus the worker’s liberty, so much exalted by the economists, jurists, and bourgeois republicans, is only a theoretical freedom, lacking any means for its possible realization, and consequently it is only a fictitious liberty, an utter falsehood.  – Mikhail Bakunin, ‘The Capitalist System’ (II)

In other words, it’s unclear to me how an economic system in which one must have money–which one can only earn by selling oneself in the market place and be subjected to the hierarchical nature of capitalist-worker relationships whereby the worker has most of the value of her labor stolen by the capitalist–constitutes true freedom.  Furthermore, it’s unclear how socialism, as an economic theory which advocates the collective ownership of the means of production, is inherently coercive.  Indeed, the point is to eliminate the coercive, exploitative, hierarchical nature of the capitalist-worker relationship, as has been noted.  Socialism does not mean–as the author seems to think–maintaining capitalism, but merely stealing from the richest members of society (who obviously work very hard and deserve every penny of their earnings) to give to the poor (who are obviously poor because they’re lazy and have a sense of “entitlement”).  That’s just a categorical misunderstanding of socialism.  So, I agree that Jesus does not advocate coercion, but for this reason I would argue that this puts him more at odds with capitalism than with socialism.

Next, the author writes,

Jesus also warns against the temptations that great wealth may expose one to. Being consumed with accumulating wealth to the exclusion of all other concerns leaves no room for devotion to God or charity to one’s fellow man. This is summed up in Luke 16:13 when Jesus says,

“No one can serve two masters. Either you will hate the one and love the other, or you will be devoted to the one and despise the other. You cannot serve both God and money.”

I completely agree.  This sounds like an argument against capitalist Jesus to me,  insofar as the capitalist would say that the only goal of capitalism is wealth accumulation (i.e., greed and infinite growth).

Moving on.

In the parable of the bags of gold (Matthew 25: 14-30), the servants who choose to be capitalists with the master’s money are richly rewarded upon the master’s return. The servant who chose not to be a capitalist is not only not rewarded, he is “cast into the outer darkness, where there will be weeping and gnashing of teeth!”

Okay, again, no one is “being capitalist”.  Capitalism did not exist.  Most of the basic ideas of capitalism did not exist.  In fact, as the author notes,

Certainly, the story is symbolic. The money in the story represents the abilities given to each individual by God. But even on that level the story does not support the anti-capitalists. First, the master, the ultimate capitalist in the parable, actually represents God. Certainly, Jesus would have found another way to make his point if capitalists were de facto sinners (like tax collectors).

So, if the story is symbolic, how again does it support capitalism?  Considering that Jesus has a lot of not-so-nice things to say about wealth, greed, the wealthy, the greedy, money, etc. throughout the Gospels, why do we suddenly assume that this parable, in which he uses metaphors that his listeners could easily understand, automatically means the he was a capitalist and that all of his hippie sayings apparently just don’t count?

Notice also that the servant who chooses not to invest the master’s money is the one given the least. Symbolically, he represents the person who has the least natural gifts or who is born to disadvantage. Does Jesus suggest that the other two servants should be taxed to help him? No. The most disadvantaged servant is expected to do the best with what he has. He isn’t punished because he achieves less. He is punished because he fails to try.

This might be a valid point if capitalism were in fact meritocratic, but clearly it is anything but.  Plenty of folks “try” their whole lives and get nowhere (economically speaking), and I doubt Jesus was naive enough to believe that the sole key to success in our uber-fair world is hard work.  Again, if this were the case, why would he advocate helping the poor if they’re just lazy bums who need to work harder?  And, again, the author’s misunderstanding of socialism, as noted above, rears its ugly head.

In two other parables, Jesus represents God as the owner of a vineyard. In Matthew 20: 1-16, he makes the point that it is never too late for salvation and that a repentant man can claim the same salvation as one who has been devout all of his life. He represents salvation as wages paid to laborers. When a laborer who worked longer complains that he is paid no more than one who only worked an hour, the master replies,

“Friend, I do thee no wrong: didst not thou agree with me for a penny? Take that thine is, and go thy way: I will give unto this last, even as unto thee.”

Again, the message is spiritual, but Jesus uses the very libertarian, capitalist idea that no one is entitled to any more wages than both parties voluntarily agree to.

Giving everyone the same regardless of the work done?  As in, not making one’s value as a human being contingent upon one’s ability to bring monetary profit to the capitalist?  This actually seems more socialist to me.

God is again depicted as the owner of a vineyard in Matthew 21: 33-41. In this parable, the vineyard owner is even more overtly capitalist. Verse 33 in particular highlights that it is the previous work of the owner in planting the vineyard, hedging around it, and building a tower that makes the land productive before it is ever rented out to the husbandmen.

In other words, the capitalist has sacrificed his own consumption in the present to invest in land and capital goods to improve the productivity of the land. This has created an opportunity for the husbandmen to be more productive by working on the owner’s land than they would be on their own, without the land or the capital goods the owner has provided.

Yeah, this passage doesn’t have anything to do with profit-making.  Are you sure you’re not just paraphrasing Locke and assuming that this is what the Bible says?

The husbandmen are evil specifically because they act like Marxists and renege on the agreement. They kill the owner’s agents and even his son, hoping to seize all of the wealth for themselves.

Sorry, but, how the hell does reneging on agreements and murdering people imply Marxism?  Again, that seems more capitalistic to me: make profit, no matter what.  The capitalist has no implicit reason to honor agreements or value human life should such inconveniences get in the way of profit-making.  If the capitalist does honor agreements and value human life, that’s great, but s/he didn’t learn that from capitalism.  In fact, s/he probably learned that from lefty socialist types who are responsible for such crazy ideas as child labor laws and a minimum wage, and other such measures to prevent the unmitigated domination of the worker by the capitalist. 

So, to answer the question of the article, I think Pope Francis is reading the same Gospels from which the author quotes.  There’s an important difference.

Notes

(I) “There is a direct line from the new Roman conception of liberty–not as the ability to form mutual relationships with others, but as the kind of absolute power of “use and abuse” over the conquered chattel who make up the bulk of a wealthy Roman man’s household–to the strange fantasies of liberal philosophers like Hobbes, Locke, and Smith about the origins of human society in some collection of thirty- or forty-year-old males who seem to have sprung from the earth fully formed, who then must decide whether to kill each other or to swap beaver pelts.” — David Graeber

(II) And again: “If I offer my labor at the lowest price, if I consent to have you live off my labor, it is certainly not because of devotion or brotherly love for you.  And no bourgeois economist would dare to say that it was, however idyllic and naive their reasoning becomes when they begin to speak about reciprocal affections and mutual relations which should exist between employers and employees.  No, I do it because my family and I would starve to death if I did not work for an employer.  Thus I am forced to sell you my labor at the lowest possible price, and I am forced to do it by the threat of hunger.”