Category: Economic Bullshit
Labor Theory of Value
Dr. Richard Wolff debates libertarian Antony Sammeroff on the Labor Theory of Value on the Lions of Liberty Podcast, hosted by Marc Clair. This is a Marxist economist debating a free market libertarian.
I admire Richard Wolff, and his efforts to bring Marx’s views into the evaluation of capitalism. I also use Marx for this purpose. But we approach Marx from different perspectives. Wolff focuses on the labor theory of values, and defines exploitation as the surplus value obtained from an employee by the employer. I cannot dispute the meaning of “exploitation” in this technical, stipulated sense. But the word “exploitation” also carries a negative sense of injustice. Libertarians object to this additional sense of injustice, by pointing out that the employer-employee relation is based on an agreement — a contract. And, as long as both abide by the agreement, no injustice has been done.
There is an injustice, but, in my view, it does not come from the employer and his profits; it comes from the political system which bars people from free access to subsistence land — making land into a sellable and taxable commodity. This forces people into a market economy, and there is no choice here — everyone has to enter the market economy. Both employer and employee are victims from this perspective. Compare this with two gladiators thrown into the arena. One is strong; the other weaker. One wins; the other loses. One is an employer; the other an employee. The injustice is in the fact that both gladiators have been forced into the arena.
I see no reason to bring into considerations anything other than the principle of supply and demand to account for a labor market and wages. For example, in my field of philosophy, there was and is an oversupply of eligible teachers — as there is in most fields of learning; consequently, colleges have found that it is more economical to hire “adjunct” teachers than full-time teachers. Let’s take a look at the salaries at City Colleges in Chicago, where I worked as an adjunct. Full-time teacher salaries range from roughly $60,000 to $100,000 per year. So, let’s say, an average full-time teacher gets $40,000 for teaching four 3-credit courses per semester. From one perspective, this is $10,000 per 3-credit course; while the adjunct will get at most $3,000 for teaching the same course. Furthermore, an adjunct cannot teach more than 3 such courses per semester at this school; so, for 2 semesters, he can make at most, at this rate, $18,000, as contrasted with a full-time teacher who will get $80,000. Is this just? Is this a case of exploitation?
Take other cases of popular entertainers and sports stars. Such people can earn millions — and it has nothing to do with the hours of labor; it has to do with the willingness of a large number of fans and audiences to pay large amounts to view and hear them. Let me cite a recent case. Jordan Peterson recently refused to participate in a debate with Richard Wolff at Boise State University in Idaho. His reason for refusal to participate is that he wanted a minimum of $50,000 for a 1-hour debate, which the students could not pay. Apparently, this is the minimum which he gets for his public appearances. Is this just? By the principle of supply and demand, this is what he can get; and so he takes advantage of his popularity to demand whatever he can get. If he is exploiting, he is exploiting his popularity.
I see employers in this same light of trying to get the most compensation within the market system. They will pay their employees the least they can; so that they can garner the maximum profit. I find it incoherent to think here of injustice. The concept of justice makes sense only relative to a free agreement. But when considering agreements, we must also take note of the circumstances. If there is no access to free subsistence land, what alternative does a person have? Starve, beg, steal, or work at whatever is available. Both the employer and the employee have been thrust into the arena of the market, just like gladiators, and they must do the best in the circumstances. The injustice is that both employers and employees have been forced into the market economy against their will. We have all been barred from a free access to subsistence land by governments.
So, unlike Wolff who focuses on the labor theory of values, I focus in Marx on his discussion of “Primitive Accumulation” (chapter 26) in Part VIII of Capital, where he talks about the conquest and forceful eviction of people from land. It is this barring of people from a free access to land which creates a proletariat class which must work for wages — a class of wage-slaves.
Richard Wolff keeps repeating that most economists celebrate capitalism, and that one must also take into account the critics of capitalism, especially Karl Marx. This reminds me of al-Ghazali who wrote The Incoherence of the Philosophers (Tahafut al-Falasifa) which was critized by Averroes in his The Incoherence of the Incoherence (Tahafut al-Tahafut). If Marx is al-Ghazli, then we have a slew of Averroeses who have criticized portions of Marx.
And the portion of Marx which Richard Wolff emphasizes is the labor theory of values, this is also the portion of Marx which has received the most criticism. I will cite three sources for this criticism. The first is Bertrand Russell in his German Social Democracy (p. 15). The second is Karl Popper in the second volume of his Open Society and Its Enemies (chapter 20, p. 170), the third is Alexander Gray, The Socialist Tradition (chapter 12, p. 310.)
Are worker-owned enterprises antithetical to capitalism?
Richard Wolff objects to capitalism because of the employer-employee relationship which has “exploitation” — meaning that the employer gets more money than the employee. His alternative is to have worker-owned businesses.
From my perspective, although such a co-op as Mondragon makes for a democratic workplace and a desirable place to work at, it does not constitute an antithesis to capitalism — even if all businesses are co-ops. Why? If other things are left as they are (ceteris paribus), then presumably these co-ops will compete as do all businesses for markets, with the resulting consolidation of successful enterprises as occurs now.
But the crucial question which is not answered by a system of co-ops is what happens to the unemployed? Where is the safety-valve? In the United States in mid-nineteenth century, the north-eastern coast of the United States was overpopulated with immigrants. The Homestead Act of 1862 was enacted as such a safety-valve. [Whether it worked or not, is a separate issue.] The point was that giving people a free access to subsistence land was the right solution. And not giving the freed slaves access to 40 acres and a mule in 1865 was the wrong solution.
Richard Wolff, apparently does not see that the necessary condition for capitalism — of whatever form — is the deprivation to people of free access to subsistence land.
If people have access to free subsistence land, they can bargain with employers or co-ops for living conditions preferable to a self-sufficient life on a piece of land
Bertrand Russell: “. . . the fundamental concept in social science is Power, in the same sense in which Energy is the fundamental concept in physics.”
Land and Liberty
I look at the history of the United States from the perspective of a person who is forced, in one way or another, to work for a living, as contrasted, for example, to an American Indian who could go anywhere and do anything he wanted. As Rousseau put it: “Man is born free, and everywhere he is in chains.” Why is this so?
I see myself as a wage-slave. Because some may think I am exaggerating, let me explain. There is a broad sense of the term “slave” such that anyone who is forced to do anything by anyone else is a slave to that person. In this broad sense, children are normally slaves of their parents; wives are often slaves of their husbands; soldier are slaves to their superiors; worker are slaves to their employers; prostitutes are slaves to their pimps.
Slavery, in a narrow or technical sense, applies to the condition of people who are, in some sense, the property of some other person — with or without the possibility of gaining freedom. The severest form of this condition is chattel slavery in which the master is free to kill the slave.
Slavery is, then, a continuum of conditions, with degrees of restrictions, degrees of penalties, and degrees of freedoms.
In general, as I view it, slavery consists of being forced to do work for someone else. This forcing can be direct or indirect. In civilized societies, all forms of slavery are the results of laws.
Direct slavery occurs where the law stipulates that a particular person is the slave, serf, servant, laborer, or apprentice of another. Some laws allowed people to sell themselves into bondage. An example of this is the American Colonial practice of indentured servitude, whereby for the price of passage to America an immigrant sold himself into servitude for a period ranging from 2 to 7 years.
Indirect slavery occurs when the penalty for not working for someone else is a deprivation of the means for existence — a deprivation of access to subsistence land.
In the American colonies, it was unlawful to be a vagabond, i.e., a homeless person. Such people were arrested and made into laborers for someone or other. If no one could be found to take them, they were whipped and branded through the right ear. For a third offence, they were executed. As remnants of this policy, the United States still has vagrancy laws.
Direct slavery still exists in the United States in the form of military induction (when invoked). In such an event, a civilian is being forced to become a soldier. If he refuses, he will be imprisoned or, under some circumstances, executed. On the other hand, enlistment into the military is like indentured servitude — one makes an agreement with the government to serve a number of years (technically it is eight years), and the punishment for breaking such an agreement (with exceptions) is normally imprisonment.
Indirect slavery is the result of a deprivation of access to free subsistence land. The United States does not provide for free access to subsistence land, and in this manner forces everyone to get money for subsistence. Even if one manages to buy some land (or even get it for a nominal fee as was provided by the Homestead Act of 1862), one cannot simply subsist on it, because there are always state property taxes to be paid. And if these taxes are not paid, the land is confiscated by the state.
For this reason alone, it is proper to call the present economic and government system of the United States one of wage-slavery. The ultimate land owner is the government which collects property, sales, income, and other taxes as it sees fit.
In addition, because the government does have an enormous amount of money, it is also the largest employer and buyer. The bulk of its budget — about half a trillion dollars — is spent on military agents and tools of enforcement — airplanes, warships, tanks, bombs, missiles, bullets, and such. Often, the youth who are lured into the military are those who cannot afford to pay for education or job training. This is an “economic draft” which ensures that the United States government will have a steady supply of enforcers and canon fodder, drawn largely from the poor.
Capitalism, as I understand it, is the economic system which makes all land into a sellable and taxable commodity. It is a system which does not recognize an unalienable (unsellable) right to free land — though such a right is implict in the Declaration of Independence as the unalienable (unsellable) right to the pursuit of happiness. Happiness, in this instance, is nothing more than subsistence, and one cannot subsist in an independent and self-sufficient manner without access to land.
All major peasant uprisings and peasant revolutions have recognized the connection between liberty and free land. And this sentiment was expressed by peasants; not by landlords or merchants (bourgeoise). Landlords simply wanted to maintain possession of their lands, while merchants wanted to purchase land. It was to the advantage of peasants only to have access to free land.
The English, the American, and the French Revolutions were not peasant revolutions — they were revolutions of the aristocracy against a monarchy. Though there were many peasant and slave revolts throughout history, the first successful revolution of slaves was the Haitian Revolution of 1804. In the 20th century, the Mexican, the Russian, and the Spanish Revolutions are examples of three major peasant revolutions — and it is not surprising that their slogans were “Tierra y Libertad,” “Zemlya y Volya,” Land and Liberty.
The purpose of Political Liberty is to foster Economic Liberty. Political liberty is needed to get agreement for economic policies. And although the United States allows more political freedom than any other country, because of media control by corporations, it is extremely hard to get a political consensus about better economic policies. Right now, both domestically and internationally, the United States is against any policy which would give away land for free to anyone, without also making it a sellable commodity. Consequently, the following may be a true generalization of U.S. foreign policy: it is a suffecient reason for U.S. intervention in another country, if that country adopts an agrarian policy of giving away land for free. The underlying reason is that a country of self-sufficient and independent land owners will not yield a pool of cheap wage-slaves, including soldiers, for capitalists.
| “In former times the marauding minority of mankind, by means of physical violence, compelled the working majority to render feudal services, or reduced them to a state of slavery or serfdom, or at least made them pay a tribute. Nowadays the dependence of the working classes is secured in a less direct but equally efficacious manner, viz. by means of the superior power of capital; the labourer being forced, in order to get his subsistence, to place his labour power entirely at the disposal of the capitalist. So there is a semblance of liberty; but in reality the labourer is exploited and subjected, because, all the land having been appropriated, he cannot procure his subsistence directly from nature, and, goods being produced for the market and not for the producer’s own use, he cannot subsist without capital. Wages will rise above what is wanted for the necessaries of life, where the labourer is able to earn his subsistence on free land, which has not yet become private property. But wherever, in an old and totally occupied country, a body of labouring poor is employed in manufactures, the same law, which we see at work in the struggle for life throughout the organized world, will keep wages at the absolute minimum”
F. A. Lange, Die Arbeiterfrage. Ihre Bedeutung fur Gegenwart und Zukunft. Vierte Auflage. 1861, pp. 12, 13. Quoted by H. J. Nieboer, Slavery: As an Industrial System (Ethnological Researches), 2d edition, 1909, p. 421. |
Solution to the Unemployment Problem
A Free Land Amendment to the Constitution of the United States
Each person has a right to free and non-taxable subsistence land.
“. . . every man has, by the law of nature, a right to such a waste portion of the earth as is necessary for his subsistence.” Thomas More, Utopia
“Not the constitution, but free land, and its abundance of natural resources open to a fit people, made the democratic type of society in America for three centuries.” Frederick Turner, Chapter XI, The West and American Ideals, Frontier in American History.
| If a person has no access to land, then that person
If a person is unemployed and does not want to starve and does not want charity, then that person must live by criminal activity. |
“. . . overpopulation is critical today and may well make the distribution question moot tomorrow.” Paul and Anne Ehrlich, The Population Explosion (1990), p. 21. |
Can Capitalism and Democracy Coexist?
Chris Hedges interviews Sheldon Wolin.
Sheldon Sanford Wolin (August 4, 1922 – October 21, 2015) was an American political theorist and writer on contemporary politics.
The Red Bureaucracy: Authoritarian Socialism vs Libertarian Socialism
Cameron Watt clearly explains the difference between authoritarian and libertarian socialists, and argues in favor of libertarian socialism (=anarchism).
The difference between democratic socialism and revolutionary socialism
Socialism in all forms strives to improve the economic life of the downtrodden people — the homeless, the poor. And this can be done only by political means. Democratic socialists hope to do this through parliaments, through congresses of representatives or deputies. Revolutionary socialists, by contrast, think this can be done only by changing the political institutions.
Authoritarian socialists think this can be done by their party taking control of the central government. The assumption is that a central government (i.e. the State) is necessary to do this. In the Soviet Union there was no socialism; there was State capitalism. The government took over the factories and farms and hired wage-workers. And these products entered into the international market.
Libertarian socialists, by contrast, want to get rid of a central government altogether, i.e., the State, and replace it with a federation of small communities governed by democratically elected councils.