Wednesday, June 22, 2016

One person, one paycheck

The most controversial of the three pillars of socialism is "one person, one paycheck": all individuals have an equal demand on the social product, and an equal obligation to contribute to the social product. I've written about this topic earlier, so let me recap. Strict equality of demand entails that:

  • Generally, each person receives the same demand on the social product (income) per hour of production of the social product (work)
  • Both leisure and "stuff" are part of the social product: people can trade stuff for leisure: they can have more or less leisure and receive less or more stuff
  • The people democratically decide to permit deviations from the above, and the deviations should be self-limiting and self-correcting

The moral basis for strict equality rests on the inherent immorality of income and wealth inequality: inequality is a result of differential success in rent-seeking (direct or indirect expropriation of the surplus value of labor). Successful rent-seeking often requires cleverness and hard work, but it is not the cleverness or hard work per se that are rewarded; instead, capitalist society rewards success at rent-seeking and punishes failure at rent-seeking. Capitalism rewards "successful" people by giving them the value of others' labor, and punishes "unsuccessful" people by expropriating their labor. Regardless of how we nominally structure an economy, if there is income inequality, there is exploitation.

Furthermore, income inequality is dynamically unstable: inequality is self-perpetuating and exhibits positive feedback. Because no system of political economy can stand outside society, people with a little bit more economic power have more power to manipulate social and legal rules to further increase their power. This dynamic instability is ubiquitous, and simply eliminating income inequality will not abolish it, but it seems counterproductive to enshrine a social construct that is unstable by design.

Economically, people's behavior is constrained or encouraged by any number of non-economic factors, e.g. social status, the approval of others, fame, professionalism, and, of course, the violence of the state. (And it is just as violent, and just as much state violence, to make a person to starve as it is to put him in prison.) Economic incentives should be not be the default position, but a last resort, taken with due democratic deliberation.

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