On this week's episode of Economic Update, Prof. Wolff provides updates on Europe's new econ stimulus, French workers rally for job security, US airlines' rip-off fees. Response to question about government blame for economic crisis since 2008. Major discussions on what capitalist profit is and on the basic economics of our political party system.
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I tried to post a reply to your comments several days ago but my comments seem to have been lost somehow. I’ll try here to recall what I said before but perhaps be more brief.
The main point I was trying to get at is that for someone to work they need a place to do the work and usually some equipment to work with. There is value in that.
Under capitalism, someone who has established a place of business and acquired the necessary equipment has the right to earn rent on that property. Now the socialist position seems to be that charging that rent is exploitation and it should not be allowed.
But under capitalism, that potential for charging rent and earning income base on that earlier investment serves as the motivation for making the investment; in Bill’s case, if that potential had not been there he probably would never have built such a large and well-equipped shop but instead would have only put in one station where he would work alone.
So how, under socialism, do we provide workplace and equipment? Do we use the Soviet model and insist that only the government can own the means of production?
I’m sure that Richard Wolfe would say no, that workers should get together, pool their resources and build the infrastructure needed for the business. But how exactly does this work in the barbershop example? Bill was building the shop even before many of the other barbers were even born. How would he get those unborn barbers to pool their resources with him? And how, under this model, are new workers brought into an existing worker-owned enterprise and how do older workers leave behind all that property they invested in at an earlier date?
Please keep in mind that I am trying to understand this concept and that is not the same as arguing against it.
Exploitation is a relationship between two or more people wherein the exploited performs labor whose compensation is not commensurate with that labor and the surplus value of this labor is appropriated by the exploiter under the illusion that it is compensation for their labor. Essentially, exploitation is a social relation wherein an “actor or character of actors uses others for their own end because of a fundamentally asymmetric power relationship between them”, as defined in the “Encyclopedia of Power” (Sage Publications, Inc.). It doesn’t matter how well the exploiters treat the exploited, or whether both are satisfied with the arrangement; those are moral interpretations superimposed on a relationship which is nonetheless exploitative. All that matters is the relation and distribution of power therein. Under this definition, is Bill the Barber exploiting his workers? I would argue yes, just as all capitalists exploit their workers.
Why do you think that the relationship between workers and capitalists is symbiotic? Although it may appear as much, since capitalism as an economic system necessitates the relations of production which form this relationship, a further analysis of just what that relationship is, in my opinion, would quickly reveal that the capitalist performs a parasitic and ultimately unnecessary role in the production of goods and services. The necessity of capitalists only exists because capitalism exists, just as the necessity of slavers only exists because slavery exists. When it comes to production, however, capitalists (or class or any other hierarchical organizational structure) are ultimately optional. If the workers owned and operated the means of production—if the employees at Bill’s barbershop owned the business, land, and all the equipment—then there would be no need for capitalists leeching off the labor of their workers and providing a service—if anything at all—which the workers could provide themselves if they owned and operated the enterprise.
The problem I believe you’re having is that you believe capitalists are a necessary component in the economy and that they perform a role that workers cannot perform for themselves. This is demonstrably false and the successful existence of worker-owned cooperatives throughout history demonstrates as much. The other assumption which I believe you’re making is that Bill the Barber is any different from the capitalist bankers on Wall St. or the shareholders and boards of directors which own the multinational corporations currently destroying our economy and world. Yes, the particulars of their jobs may be different, but both Bill the Barber and all the other capitalists share a common relation with their workers: they exploit them. Specifically, the capitalists appropriate the surplus value of the workers’ labor in order to generate their own incomes, which necessarily requires them to pay their workers less than commensurate with their labor.
What is different in the fundamental economic relationship between Bill the Barber and his barbers, and any other CEO and their employees? Scale and that’s it. Bill’s barbershop may be an example of “small-scale capitalism”, but Wal-Mart is likewise an example of large-scale capitalism. In both cases, the relations of production remain the same because the economic system (capitalism) remains the same, and thus exploitation occurs. Only by changing the economic system through reorganizing the relations of production can exploitation end. That change is called socialism.
Right now take a look at Airline rates and theprofits that airlines are making while gouging consumers and underpaying their employees.
I have no argument with capitalism; it is with greedy capitalism and with lies. Please go see the film, based on a TRUE investigation, “The Big Short”. These are real human beings who know what they would be doing to the world economy in addition to the U.S.’s economy and they did it anyway. How would you feel if you were one of the persons who has been out of work and cannot ake can of your family.
Right now take a look at Airline rates and theprofits that airlines are making while gouging consumers and underpaying their employees.
I have no argument with capitalism; it is with greedy capitalism and with lies. Please go see the film, based on a TRUE investigation, “The Big Short”. These are real human beings who know what they would be doing to the world economy in addition to the U.S.’s economy and they did it anyway. How would you feel if you were one of the persons who has been out of work and cannot ake can of your family.
Sometimes clarity comes from an example, so let us consider Bill’s Barber Shop where I have been getting my hair cut for nearly a dozen years. Bill used to cut my hair himself while his two huge but friendly dogs laid on the floor hoping for some attention from other clients. Sometimes there was another barber in the shop but often it was just Bill. He lived upstairs above the shop with his two dogs. Over the years I gradually saw Bill and his dogs less and less and now rarely see him in the shop; given the conversations I had with him years ago, I suppose he is out hunting and fishing while his four or five barbers cut hair. But Bill is now a capitalist, living mostly off the labor of his workers.
I’m sure Bill gets some cut of the money each barber earns with his or her labor but at the same time, without Bill and his shop, those barbers might be out on the street looking for work. Bill’s shop has some of the nicest equipment I’ve seen in any barber shop before. I’m sure that’s at least one reason the shop is so popular.
This is small-scale capitalism and I see nothing wrong with it. It seems to me this is a very good symbiotic situation with everyone benefiting. Am I somehow to understand that this is wrong? Is it really an exploitative relationship?