Saturday, October 31, 2009

Labor and labor power

We can define labor as human activity that produces a commodity*. Labor power is the ability to perform labor, very much like potential energy in classical physics. We make the distinction because under capitalism, the ordinary working person exchanges his or her labor power for some price; the purchaser of the labor power then uses the labor that the labor power affords to create a commodity.

*Technically, labor produces any item of value. Since most items of value under commodity relations are intended for exchange, I've cut out the terminological middle-man for the sake of brevity.

Labor power has a cost: the cost to feed, clothe, house, and maintain the person who embodies the labor power in a fit condition to perform labor, as well as the cost to reproduce, educate and train the next generation of laborers. Labor power has use-value: it can be used to create commodities that directly or indirectly have subjective value. Labor power is in fact exchanged for a price.

Thus: labor power is a true commodity.

Thus: the price of labor power under commodity relations will tend over time to its cost.

Thus: those people who exchange their labor for a price will, over time, receive the minimum necessary price for survival and reproduction.

Human beings have an amazing capacity for enduring hardship and misery as the price of survival; the cost of labor power — and thus its price — can thus be made depressingly low.

In my introduction, I enumerated some of the horrific and intolerable conditions of present day society. But just the bare fact of those conditions is not enough — and should not be enough — for a rational person justify a radical change abandoning capitalism. It might be the case that these problems are no more due to capitalism than the misery and suffering caused by earthquakes or volcanoes. It might be the case that we just have the "wrong" kind of people in the capitalist ruling class.

All of the above may be true, but even the nicest, most well-intentioned and intelligent person must submit to the larger social and economic relations of a society. It is inherent and ineluctable under commodity relations that as long as labor power is treated as a commodity, those who exchange their labor power will tend over time to receive the minimum necessary — which ain't a lot — for survival and reproduction, no matter how much surplus their actual labor produces.

12 comments:

  1. If I understand this argument correctly, you're taking the neoclassical position that markets tend towards equilibrium. The problem I have with the way you've stated this is that you've only considered this impact on labour. According to the theories used to reach your conclusion, the same sort of thing should happen to the price of capital, in that it should tend towards its true cost in equilibrium markets. I think we'd both agree that as it pertains to capital this is obviously not the case. Could you explain why you feel the equilibrium model of perfect competition is sufficient to explain labour tending towards its cost but not capital?
    Also, at the risk of sounding ingratiating, I'm very happy to see that you're blogging again

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  2. The Privilege of Capitalism

    It is not just commodity relations and competition that push the price of labor power to its cost: There's the socially constructed decision to make labor power subject to more-or-less strict commodity relations, to subordinate labor power to privilege capital, which is socially constructed to be exempt from perfect competition and strict commodity relations.

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  3. So if that's the case, doesn't that suggest that the problem isn't one inherent with capitalism per se, so much as the social construct of privileging capital over labour? Would communism in this case still follow general market principles of competition and efficient markets, but simply value labour over capital instead of the reverse that we experience under our current model of capitalism?

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  4. Capitalism is the privilege of capital over labor. That's why it's called capitalism, not free-marketism. It is precisely the reversal of privilege that is the essence of communism and socialism.

    I agree with Lenin's position (as I see it) that the transitional (or "lower") form of socialism still has some form of commodity relations: we count, however, the cost of a commodity as the labor expended (adjusted by intensity and other factors), not the labor power required to create that labor.

    We would require changes to the physical means of production — possibly hyper-automation (see socialist science fiction author Mack Reynolds) — to get rid of commodity relations entirely, by having so much stuff that that the specifically adversarial nature of exchange becomes marginalized or eliminated.

    Non-adversial exchanges of commodities predominated in some early societies in resource-rich areas such as the Pacific Islands and the Pacific Northwest... at least until we white folk came around.

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  5. Capitalism - an economic system in which investment in and ownership of the means of production, distribution, and exchange of wealth is made and maintained chiefly by private individuals or corporations, esp. as contrasted to cooperatively or state-owned means of wealth.

    I understand that this isn't your definition of Capitalism, I don't even necessarily disagree that in practice that's how it works, but I don't see much support for your thesis in any of the actual economic theory that (in my opinion) defines capitalism. I don't believe Adam Smith or even Milton Friedman would agree that capitalism is defined as the privileging of capital over labour. I guess what I'm saying is I don't feel that a competitive market system of commodity exchange (which would be what most people think of when they think of capitalism) inherently privileges any group. I think for that you need to look to corporatism and other systems of power and propaganda that predate (although certainly have been refined and evolved since) capitalism.

    As an aside, the pot-latches that you refer to weren't exactly lovey dovey hug fests, they were means of chiefs to demonstrate their dominance over rivals and despite white efforts to stamp them out exist to this day. They're certainly an alternative means of commodity relations to markets but they were hardly altruistic

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  6. Capitalism - an economic system in which investment in and ownership of the means of production, distribution, and exchange of wealth is made and maintained chiefly by private individuals or corporations, esp. as contrasted to cooperatively or state-owned means of wealth.

    This is, of course, a definition of capitalism created by capitalists; we would be astonished only if it were not self-serving. You have to look beyond the definitions to what actually happens in the real world, and especially the emergent properties of a system.

    Ownership, especially absentee, abstract ownership, is a form of privilege. We should be attentive to and suspicious the social construction of the "natural" or "objective" rights of property ownership promulgated by capitalists.

    It is empirically the case that the owners of capital have social, political and economic privilege. We can see this very simply by observing that labor power is subject to strict commodity relations and capital is not. Note too that the definition of capital omits the ownership of a person's own time.

    I don't feel that a competitive market system of commodity exchange (which would be what most people think of when they think of capitalism) inherently privileges any group.

    It depends on what you mean "inherently" privilege. Very little privilege — capitalist privilege, male privilege, white privilege —
    is explicitly asserted by definition; it always seems to "fall out" of seemingly general, neutral propositions. The ability of human beings to hoodwink each other with ideological bullshit should never be underestimated, especially by an atheist.

    The present-day physical means of production are such that the ownership of capital creates social and political privilege, because the owner of capital is not obliged to exchange the value of his capital for the value of the actual labor contributed by the worker. When the ownership of capital is individual, then those individuals acquire privilege. And that's why communists and socialists focus not on redistributing income, but redistributing the ownership of the means of production.

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  7. And I didn't say that the potlatches were love-fests; I was using "adversarial" in the technical sense, of trying to maximize one's own share of a zero-sum game. Those exchanging commodities were not trying to competitively establish the best price.

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  8. The sort of absentee ownership and other privileges of owners of capital don't arise from a competitive market exchange of commodities, they arise from power structures that predate capitalism. The noble granted title to the land becomes the absentee landholder. These are consequences of imperialism and class privileges that predate capitalism. In communist Russia or China, much of the wealth of privilege stayed in the hands of the old ruling class, much as much of the wealth has stayed with traditionally wealthy families in the West. In neither case is this a consequence of the economic system but of the fact that power is remarkably resistant to challenges to it. My parents saved up money and bought a small business making candles, I don't think either of us would say they were exploiting their workers, although they certainly owned the means of production. Particularly in my case since I know they put in more hours and made less than anyone they employed. While I also oppose the privilege of many who have excessive capital, I oppose it because it's unearned, because they have it through inheritance or other means besides the production of value. Again, I don't think the privilege that we both oppose is inherent in competitive markets of exchange, but in entrenched power interests maintaining their influence and privilege unjustly by means of corporatism and propaganda.

    I must have missed the point of the pot latch reference. I assume you're not advocating it as a system of governing our own economic affairs, was it just a way of demonstrating that there have been other means of organizing commodity exchanges?

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  9. The sort of absentee ownership and other privileges of owners of capital don't arise from a competitive market exchange of commodities, they arise from power structures that predate capitalism.

    It's true, they don't arise from commodity relations. That's why I explicitly separate the two components of capitalism. I don't think it's correct, however, that capitalist privilege arises only or even mostly from pre-capitalist power structures. The ownership of capital provides the capitalist class with economic "muscle" that they can and do use to create and maintain political, social and legal power.

    (Another way of looking at it is that ownership of capital, and the ability to impose rent on those who actually use the capital to create items of value, is an externality which undermines an essential component of the theoretical model of competitive exchange.)

    In communist Russia or China, much of the wealth of privilege stayed in the hands of the old ruling class, much as much of the wealth has stayed with traditionally wealthy families in the West.

    I don't think either of those assertions are actually correct, especially in Russia and China. In all areas, individual members of the old ruling class were to some extent absorbed into the new ruling class, but the new ruling class was substantially distinct. Why bother to have a half dozen violent bourgeois revolutions and a couple of communist revolutions? Who is revolting against whom?

    My parents saved up money and bought a small business making candles, I don't think either of us would say they were exploiting their workers, although they certainly owned the means of production.

    Probably not, or at least not much. The small capitalists (petite bourgeoisie) typically derive their income from their own labor, not from simple ownership of capital; their ownership is not absentee but instrumental, similar to a mechanic owning his tools.

    I assume you're not advocating it as a system of governing our own economic affairs, was it just a way of demonstrating that there have been other means of organizing commodity exchanges?

    Yes, that's correct.

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  10. Another humorous but perspicacious examination of alternative forms of non-adversarial commodity exchanges can be found in Frederick Pohl's science fiction story, The Midas Plague:

    In this new world of cheap energy, robots are overproducing the commodities enjoyed by mankind. So now the "poor" are forced to spend their lives in frantic consumption, trying to keep up with the robots' extravagant production, so that the "rich" can live lives of simplicity. This story deals with the life of a man named Morey Fry, who marries a girl from a higher class. She is unused to a life of consumption and it wears at their marriage. Morey eventually hits on the idea of having the robots help him to consume his quotas. At first he fears punishment when he is discovered, but instead the Ration Board quickly implements his idea across the world. [Wikipedia]

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  11. (Another way of looking at it is that ownership of capital, and the ability to impose rent on those who actually use the capital to create items of value, is an externality which undermines an essential component of the theoretical model of competitive exchange.)
    Could you elaborate on this please? I think I follow your point but not well enough to reply

    I'll concede that in both capitalist and communist societies, the elites were not necessarily the same as they were under the previous system, but you must admit that elites did arise. At least in the communist model I'm sure you'd agree that they arose by means other than those outlined in the theoretical basis of the economic structure, which implies that there is something else at work.

    I still don't get the potlatch reference, sure it wasn't adversarial in the sense that it was meant to establish competitive prices. But it was a terrible means of exchange. The whole purpose was to construct and maintain a rigidly stratified society, many of the goods were destroyed purely to demonstrate either excessive wealth or contempt for the gifts of others, not to mention human trafficking was a component of many of them. Sure it's an alternative to commodity relations, but it's a terrible one.
    Regarding the midas plague, while it sounds like a fascinating story I think we can agree that we're a long way from the sort of issues it envisions, I'd prefer to keep the discussion in the context of our current situation where resources are scarce, if that's acceptable to you

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  12. Bed time for me. I'll reply (and approve additional comments) in the morning.

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