Why is the worker's labor worth more than the wage?

[Judicator]

(the wage that the capitalist pays him)

The common complaint is that the capitalist who hires the worker somehow pays him less than what the labor is worth, keeping the extra as "profit". Is this any different from a farmer complaining the buyer of his grain is paying him less than he deserves, or a wholesaler complaining about a retailer underpaying him? All of these cases can be thought of as a commodity changing hands. Are these all examples of an unjust price? If not, what makes wage labor special?

[Geiseric]

A workers wage isn't equal to what it is really worth because the capitalist needs to cheapen his product in order to compete. The worker's time and labor is obviously worth more than he/she is paid for, if somebody spends 10 hours a day at a construction site, and does backbreaking labor only to be returned with having to spend all his wages on bills so he and his familly struggle to afford their home and even food in alot of cases, how would one not see that as an injustice?

Ohhh, the owner of the construction site does hard work too!

No, the architect does hard work, the building planners do hard work, the owner simply buys the labor off other people and keeps the profits to himself

[CommunityBeliever]

It isn't just the value of the worker's wage that we take issue with, it is his relationship to the means of production. After receiving a wage from the capitalist the worker has to pay a large part of it right back to the capitalist from taxes, debts, rent, utility bills, and other liabilities. This effectively means that the net worth of the capitalist is vastly greater then that of the worker, which is a considerable injustice.

[o well this is ok I guess]

Both the farmer and the wholesaler probably underpay their workers.

[Nothing Human Is Alien]

The worker sells her laboring power (labour-power) with a capitalist in exchange for her means of subsistence. The capitalist then has use of her productive capacity for a set period of time. In that period of time, she produces more than what is required for her subsistence. She gives the accumulated labor in the capitalist's possession a greater value than it had before. She has created surplus value (profit).

If you're actually interested in learning about this, see Value, Price and Profit (http://www.marxists.org/archive/marx/works/1865/value-price-profit/) and Capital (http://www.marxists.org/archive/marx/works/1867-c1/).

[Judicator]

A workers wage isn't equal to what it is really worth because the capitalist needs to cheapen his product in order to compete. The worker's time and labor is obviously worth more than he/she is paid for, if somebody spends 10 hours a day at a construction site, and does backbreaking labor only to be returned with having to spend all his wages on bills so he and his familly struggle to afford their home and even food in alot of cases, how would one not see that as an injustice?

Why isn't the value of a commodity is just the price you could get when you sell it?

To say "it's obviously worth more" begs the question.


It isn't just the value of the worker's wage that we take issue with, it is his relationship to the means of production. After receiving a wage from the capitalist the worker has to pay a large part of it right back to the capitalist from taxes, debts, rent, utility bills, and other liabilities. This effectively means that the net worth of the capitalist is vastly greater then that of the worker, which is a considerable injustice.

Is the capitalist responsible for the well being of the worker? If I buy bread from a shopkeeper, am I responsible for his well being? Am I doing something unjust, as a consumer, by seeking out the cheapest price? What's unjust about paying the market rate for a product? You don't set the market rate.

Are you saying that the transaction is just, but the wealth outcomes aren't. That is, are you saying through a series of just actions, you can get an unjust situation?


Both the farmer and the wholesaler probably underpay their workers.

Why is it an underpayment? The market value of labor is the wage and that's what workers get.

[o well this is ok I guess]

Why is it an underpayment? The market value of labor is the wage and that's what workers get. Then by the same measurement, so long as the offered price given to the farmer and the wholesaler is the market value, who are they to complain? There is then no example of an unjust price in any instance here.

Is this what you mean to say?

[CommunityBeliever]

The capitalist system is based upon the rule of the capitalists. As rulers, the capitalist classes use taxes, debts, and liabilities, as well as the exploitation of the surplus value which you already mentioned to exploit the working class.

These combined effects leave the worker with virtually no net income to spend on "entrepreneurship", keeping the worker and his/her children in the same social class. On the other hand, the capitalists use inheritance to give their wealth to their children, spreading their social class across generations. See the Rockefeller family (http://en.wikipedia.org/wiki/Rockefeller_family), the Rothschild family (http://en.wikipedia.org/wiki/Rothschild_family), and the Walton family (http://en.wikipedia.org/wiki/Walton_family), for starters.


Is the capitalist responsible for the well being of the worker? If I buy bread from a shopkeeper, am I responsible for his well being?The capitalist is not responsible for the well being of worker because there is nobody to hold him responsible.


Are you saying that the transaction is just, but the wealth outcomes aren't. That is, are you saying through a series of just actions, you can get an unjust situation?I only apply the term "just" to the ends, not the means. The capitalist system as a whole is unjust not the individual capitalists.

[Judicator]

Then by the same measurement, so long as the offered price given to the farmer and the wholesaler is the market value, who are they to complain? There is then no example of an unjust price in any instance here.

Is this what you mean to say?

I'm trying to separate two possible sources of injustice:

1) The capitalists act of hiring the worker at the market rate is unjust
2) The market wage rate is, itself, unjust

As you've noted above, I would argue there isn't an instance of (1). That leaves us with (2) which seems dubious...since (2) is essentially an aggregate of (1).

[Jimmie Higgins]

Why is it an underpayment? The market value of labor is the wage and that's what workers get.Yes, the value of commodities comes from the combination of the value of the materials and overhead (what Marx called "dead labor") and the value of the average amount of worker's labor that went into the finished commodity.

So if you are making clocks, then the value is based on the value of the materials plus the average (according to the prevailing methods of production) labor time and value it takes to assemble the materials and get the product ready for market. The "hidden" exploitation is that the value of the commodity is partially based on what the value of the labor is, but worker's don't get paid per-item they produce, they get paid on a time-basis. So I work at a hotel where to make-up one room it costs the company $60 in labor plus other overhead - the overhead can't produce more than what it does - the hotel doesn't produce extra rooms than it has, soap can only be watered down so much etc. But the workers don't get paid the value of each room they help prepare, they get paid hourly, so to increase exploitation, the bosses have fired one of the maids while still requiring the others to do the job, now they get paid the same hourly wage, and the price of the room is still the average value of the materials and labor, the maids are adding more value than they are paid for.

[o well this is ok I guess]

I'm trying to separate two possible sources of injustice:

1) The capitalists act of hiring the worker at the market rate is unjust
2) The market wage rate is, itself, unjust

As you've noted above, I would argue there isn't an instance of (1). That leaves us with (2) which seems dubious...since (2) is essentially an aggregate of (1). Let me pose a question.

What is justice? Is it fairness, or something else? How does one determine "fairness"?

[CommunityBeliever]

I'm trying to separate two possible sources of injustice:

1) The capitalists act of hiring the worker at the market rate is unjust
2) The market wage rate is, itself, unjust

As you've noted above, I would argue there isn't an instance of (1). That leaves us with (2) which seems dubious...since (2) is essentially an aggregate of (1). It is the capitalist system as a whole (not just the market-wage-rate) that is unjust. We also don't blame individual capitalists because they are just a part of the system.


If not, what makes wage labor special? Wage slavery is a special case because of the fact that workers are forced into a job at threat of poverty. Poverty involves starvation, homelessness, and harassment from the police and the state among other things. This leaves the worker no choice.

LrPdZmPB36U
Police harassment of homeless/unemployed ^^

[Geiseric]

What it comes down to is an amoral situation, because in order to maintain a company and have the stockowners happy, you need periods of short term profit. Eventually another company copies what you do, and somebody needs to come up with a way to make more profit. one, two, or three companies end up buying all the competition, and eventually it comes down to the monopolies of one state conflicting with those of another capitalist state i.e. germany vs. england, and there's wars over the colonies or the areas with spheres of imperialist influence. Read Lenin's Imperialism: The highest stage of capitalism.

[Nothing Human Is Alien]

If not, what makes wage labor special? I've already explained that, in the only post in this thread that you've ignored.


injusticeIt's actually not a question of "morals" or "injustice." It's a cold hard fact that is the basis of capitalism, the basis of the main contradiction of capitalism, and the basis of the struggle between labor and capital that must go on until it is resolved one way or the other.

"...the value of labour-power, and the value which that labour-power creates in the labour-process, are two entirely different magnitudes; and this difference of the two values was what the capitalist had in view, when he was purchasing the labour-power.... What really influenced him was the specific use-value which this commodity possesses of being a source not only of value, but of more value than it has itself. This is the special service that the capitalist expects from labour-power, and in this transaction he acts in accordance with the 'eternal laws' of the exchange of commodities. The seller of labour-power, like the seller of any other commodity, realises its exchange-value, and parts with its use-value. He cannot take the one without giving the other. The use-value of labour-power, or in other words, labour, belongs just as little to its seller, as the use-value of oil after it has been sold belongs to the dealer who has sold it. The owner of the money has paid the value of a day’s labour-power; his, therefore, is the use of it for a day; a day’s labour belongs to him. The circumstance, that on the one hand the daily sustenance of labour-power costs only half a day’s labour, while on the other hand the very same labour-power can work during a whole day, that consequently the value which its use during one day creates, is double what he pays for that use, this circumstance is, without doubt, a piece of good luck for the buyer, but by no means an injury to the seller." - Marx

[RGacky3]

WHen a capitalist buys a machine he pays a full price for it, with a machine he can't make something, he needs to hire someone, so he hires someone, which makes something worth more than he's gonna get (variable capital), the extra money is'nt going to the machine, because thats also paid for (fixed capital), nope its going to the capitalist, that money is 100% comming from the worker.

If you want to know what a fair compensation is make the compensation be democratically decided, then you'll see how much the capitalist is actually worth.

[CommunityBeliever]

It's actually not a question of "morals" or "injustice." Just to clarify, I was using the term unjust to refer to the inequitable/uneven distribution of benefits in capitalism, not to any sort of subjective morality.

The capitalists have vastly greater net worth then the worker's which creates an uneven distribution of benefits.

[Jimmie Higgins]

Why isn't the value of a commodity is just the price you could get when you sell it?

To say "it's obviously worth more" begs the question.Price and value are two related but separate things. In the market, the prices fluctuate, but the value of commodities in relation to other commodities does not (unless there is some sort of abnormal circumstances like a crop failure or something). So while the price of a wheel fluctuates and the price of a car fluctuates, the value of a car will always be more than the value of a wheel because the car incorporates the value of the wheels.

My question to you is where does new value come from if you reject the Labor Theory of Value?

[Veovis]

Case in point:

During a meeting with my supervisor I was told I pulled in an average of several hundred dollars an hour for the company the previous week, yet I'm only paid 10 of those dollars. Hence I'm working for a tiny fraction of what I produce.

[Maslo]

Wage slavery is a special case because of the fact that workers are forced into a job at threat of poverty. Poverty involves starvation, homelessness, and harassment from the police and the state among other things. This leaves the worker no choice.

So under social capitalism with good welfare system (my proposed NIT BI), when there is no threat of poverty, wage labor is OK, just like selling other comodities at mutually agreed on price is OK.

Thats what I wanted to hear in the other thread! :)

LTV is illogical because it treats voluntary selling one specific commodity (labor) as something fundamentally different than selling other commodities (food, products, services..). That simply does not make sense. Restricting mutually voluntary contracts is immoral and totalitarian, no matter what or to who you sell.

[Veovis]

Restricting mutually voluntary contracts is immoral and totalitarian, no matter what or to who you sell.

"Voluntary" is in the eye of the beholder.

[CommunityBeliever]

So under social capitalism with good welfare system (my proposed NIT BI), when there is no threat of poverty, wage labor is OK, just like selling other comodities at mutually agreed on price is OK.

Thats what I wanted to hear in the other thread! :)And as we pointed out in the other threads, "social capitalism" is a pipe dream.

Every social/welfare program that has ever arose in capitalism, did so to temporarily placate class struggle. These social programs eventually come up against the capitalists desire to accumulate ever more capital, and then they disappeared until class struggle intensified itself again.

[Nothing Human Is Alien]

LTV is illogical because it treats voluntary selling one specific commodity (labor) as something fundamentally different than selling other commodities (food, products, services..).

You have no idea what you are talking about. At all. You have never read Marx, or if you did, you didn't understand a word of it.

Try again.

[Nothing Human Is Alien]

Wage slavery is obviously related to surplus value and the exploitation of the proletariat, but people here are confusing the two.

Here's the down and dirty:

Wage slavery

"The essence of all slavery consists in taking the product of another's labor by force. It is immaterial whether this force be founded upon ownership of the slave or ownership of the money that he must get to live." - Leo Tolstoy

Surplus value

"...the value of labour-power, and the value which that labour-power creates in the labour-process, are two entirely different magnitudes; and this difference of the two values was what the capitalist had in view, when he was purchasing the labour-power.... What really influenced him was the specific use-value which this commodity possesses of being a source not only of value, but of more value than it has itself. This is the special service that the capitalist expects from labour-power, and in this transaction he acts in accordance with the 'eternal laws' of the exchange of commodities. The seller of labour-power, like the seller of any other commodity, realises its exchange-value, and parts with its use-value. He cannot take the one without giving the other. The use-value of labour-power, or in other words, labour, belongs just as little to its seller, as the use-value of oil after it has been sold belongs to the dealer who has sold it. The owner of the money has paid the value of a day’s labour-power; his, therefore, is the use of it for a day; a day’s labour belongs to him. The circumstance, that on the one hand the daily sustenance of labour-power costs only half a day’s labour, while on the other hand the very same labour-power can work during a whole day, that consequently the value which its use during one day creates, is double what he pays for that use, this circumstance is, without doubt, a piece of good luck for the buyer, but by no means an injury to the seller." - Marx

[Jimmie Higgins]

LTV is illogical because it treats voluntary selling one specific commodity (labor) as something fundamentally different than selling other commodities (food, products, services..).In what way? Labor is a commodity, I thought that was part of the LTV theroy.


Restricting mutually voluntary contracts is immoral and totalitarian, no matter what or to who you sell.What do you mean specifically, I'm not sure what you are referring to here.

[Nothing Human Is Alien]

LTV is illogical because it treats voluntary selling one specific commodity (labor) as something fundamentally different than selling other commodities (food, products, services..).

In this thread, right above your post:

"The seller of labour-power, like the seller of any other commodity, realises its exchange-value, and parts with its use-value." - Marx

[Nothing Human Is Alien]

social capitalism

"To clamour for equal or even equitable retribution on the basis of the wages system is the same as to clamour for freedom on the basis of the slavery system. What you think just or equitable is out of the question. The question is: What is necessary and unavoidable with a given system of production? After what has been said, it will be seen that the value of labouring power is determined by the value of the necessaries required to produce, develop, maintain, and perpetuate the labouring power." - Marx


good welfare system

Which is just a part of the cost of reproducing the working class. In this case, it comes out of the total product of labor (taxes) instead of the direct labouring-power-for-wages exchange, and always for a specific reason (e.g. to head off unrest).


What do you mean specifically, I'm not sure what you are referring to here.

Don't worry. He isn't either.

[CommunityBeliever]

After what has been said, it will be seen that the value of labouring power is determined by the value of the necessaries required to produce, develop, maintain, and perpetuate the labouring power.

This is a very good point which both answers the topic of this thread and why social capitalism can never work :thumbup1:

[Maslo]

"Voluntary" is in the eye of the beholder.

No it is not.

[Maslo]

Every social/welfare program that has ever arose in capitalism, did so to temporarily placate class struggle. These social programs eventually come up against the capitalists desire to accumulate ever more capital, and then they disappeared until class struggle intensified itself again.

Some social programs were here for almost a hundred years.


And as we pointed out in the other threads, "social capitalism" is a pipe dream.

Social capitalism, which has actually existed in reality for many decades in many countries, and produced highest quality of life on the planet is a pipe dream. But socialism, which has never actually existed (or only very temporarily) and is only a theoretical construction is not a pipe dream at all!
:D

All you have pointed out is that capitalists will somehow corrupt the government over time, while ignoring that direct democracy I speak of is immune to that.


"The essence of all slavery consists in taking the product of another's labor by force. It is immaterial whether this force be founded upon ownership of the slave or ownership of the money that he must get to live." - Leo Tolstoy

Not applicable to social capitalism. Capitalist never owns an employee, and employee is never dependant with his life (basic necessities) on employers money due to welfare (only for obtaining luxuries).


...the value of labour-power, and the value which that labour-power creates in the labour-process, are two entirely different magnitudes; and this difference of the two values was what the capitalist had in view, when he was purchasing the labour-power...

Yes, there is no universal value, all things have different subjective values for different people - basis of marginalist theory.
Thats why any transaction is even possible - if you buy an apple from a store, the value of an apple for you is greater than value of money you had to pay for it. For the store owner, the value of the received money is greater than the value of the apple he had to give you.

The same for labor - the value of received money for the worker is greater than the value of labor he volutarily agreed to exchange (assuming no external or internal coercion, which holds in social capitalism). For an employer the value of received labor is greater than the value of money he had to pay for it.

So are you suggesting fruit store owners exploit the customers? :D

[Maslo]

In what way? Labor is a commodity, I thought that was part of the LTV theroy.

If you sell a commodity voluntarily, you cannot be exploited by definition, since the situation after the trade is advantageous for you than situation before the trade, otherwise you would not agree to it.


What do you mean specifically, I'm not sure what you are referring to here.

Socialists want to ban mutually voluntary labor selling contracts, even through in social democracy there can be no talk of coercion in them - noone forces you directly, and you never depend on basic necessities on them with welfare (noone forces you indirectly).

[RGacky3]

LTV is illogical because it treats voluntary selling one specific commodity (labor) as something fundamentally different than selling other commodities (food, products, services..). That simply does not make sense. Restricting mutually voluntary contracts is immoral and totalitarian, no matter what or to who you sell.

No it does'nt, read about the Labor theory of value, this is actuall not Marx's idea, this was also Adam Smith's and Ricardo's idea.

[RGacky3]

Maslo, we have examples of your Social-Capitalism around europe now, and guess what, they are collapsing, the only ones that are doing well are the ones that have gone further than what you said and nationalized major productive industry or put in a co-determination law.

[RGacky3]

BTW, meaningful direct democracy is pretty damn revolutionary, don't think your gonna get that through a parlimentary system.

[Tjis]

Imagine a farmer. Lets call him Bob.
Bob recently got his hands on some amount of money, say $200. He decides to use this to hire some land and grow some crops. He hires a plot of land for $100, buys the required tools for another $100 and starts his work. After a few months his land lease is over and all his tools are used up, but he has a nice harvest which he manages to sell for $500. Since the land and the tools he needed were worth $200 together and were completely consumed in the labor process, obviously this $200 has been transfered into the produced commodities. The remaining $300 is the result of his hard work, his labor-time.

Now Bob decides to hire someone (let's call him Fred) to do the work for him. he once again pays $100 to hire the land, $100 for new tools and then hires Fred for whatever the current exchange-value is for labor-power (let's say it is another $100). He instructs Fred in the use of his tools and sets him to work. After a few months he once again has a nice harvest which he manages to sell for $500. of this $500, $200 once again comes from the exchange-value of his tools and his land. the remaining $300 once again comes from the labor-time, only this time the labor-time is not his, but of Fred. Fred receives only $100, and Bob receives $200 in profit without lifting a finger.

So Fred produced $300, but received $100. His labor-time was worth $300, but his labor-power only $100. Why this difference? It is because paying Fred costs less than the value Fred can produce in the time he's hired. The value of wages tends to converge towards the amount a worker needs to pay for all the food and bills for the time he is hired, since anything less would mean that the worker wouldn't be able to sustain himself and wouldn't be able to keep working, and anything more would mean that the worker would eventually be able to hire some land and buy some tools himself. Now admittedly both cases occasionally happen, but if they happened structurally, all the time, for every worker, capitalism wouldn't be able to sustain itself. In one case all workers would starve, in the other case all workers would move up in the world and stop being workers.

So in capitalism, there is always a group of people available for hire (since they do not own their own means of production and will never receive enough in wages to get them), and the exchange-value for their labor-power will always be less than the exchange-value for labor-time.

(note, I've been a little sloppy in my terminology. As others pointed out, price is not the same as exchange-value, but for the sake of simplicity I've assumed that they are.)

[Strannik]

If you sell a commodity voluntarily, you cannot be exploited by definition, since the situation after the trade is advantageous for you than situation before the trade, otherwise you would not agree to it.


Actually, this one is untrue. Its as if I said that since I have not been robbed, it follows that no one has stolen from me. A trade would be "just" only if both parties are aware of *all* the facts related to transaction. Not only the price but also the social value of the commodity must be known to both parties.

However, most transactions in a private property-based society take place under conditions of information asymmetry. Such "imbalances" add up and cause systemic inequality.

This is not the only criticism against capitalism, but the point is that even the claim that "individual transactions are voluntary and therefore just" is not correct.

[Maslo]

Imagine a farmer. Lets call him Bob.
Bob recently got his hands on some amount of money, say $200. He decides to use this to hire some land and grow some crops. He hires a plot of land for $100, buys the required tools for another $100 and starts his work. After a few months his land lease is over and all his tools are used up, but he has a nice harvest which he manages to sell for $500. Since the land and the tools he needed were worth $200 together and were completely consumed in the labor process, obviously this $200 has been transfered into the produced commodities. The remaining $300 is the result of his hard work, his labor-time.

Now Bob decides to hire someone to do the work for him. he once again pays $100 to hire the land, $100 for new tools and then hires a worker for whatever the current exchange-value is for labor-power (let's say it is another $100). He instructs this worker in the use of his tools and sets him to work. After a few months he once again has a nice harvest which he manages to sell for $500. of this $500, $200 once again comes from the exchange-value of his tools and his land. the remaining $300 once again comes from the labor-time, only this time the labor-time is not his, but of the hired worker. This worker receives only $100, and Bob receives $200 in profit without lifting a finger.

So this worker produced $300, but received $100. His labor-time was worth $300, but his labor-power only $100. Why this difference? It is because paying a worker costs less than the value this worker can produce in the time he's hired. The value of wages tends to converge towards the amount a worker needs to pay for all the food and bills for the time he is hired, since anything less would mean that the worker wouldn't be able to sustain himself and wouldn't be able to keep working, and anything more would mean that the worker would eventually be able to hire some land and buy some tools himself. Now admittedly both cases occasionally happen, but if they happened structurally, all the time, for every worker, capitalism wouldn't be able to sustain itself. In one case all workers would starve, in the other case all workers would move up in the world and stop being workers.

So in capitalism, there is always a group of people available for hire (since they do not own their own means of production and will never receive enough in wages to get them), and the exchange-value for their labor-power will always be less than the exchange-value for labor-time.

(note, I've been a little sloppy in my terminology. As others pointed out, price is not the same as exchange-value, but for the sake of simplicity I've assumed that they are the same.)

Great. Now substitute some labor (say 5/6 of it) with some other commodity necessary for production, for example fertilizer, to see how ridiculous LTV is in treating labor as special:

Bob recently got his hands on some amount of money, say $200. He decides to use this to hire some land and grow some crops. He hires a plot of land for $100, buys the required tools for another $100, obtains fertilizer from plant waste which multiplies his labor by 5 compared to working without it, and plants crops. After a few months his land lease is over and all his tools and fertilizer are used up, but he has a nice harvest which he manages to sell for $500. Since the land and the tools he needed were worth $200 together and were completely consumed in the labor process, obviously this $200 has been transfered into the produced commodities. The remaining $300 is the result of his work, his labor-time (1/6 - $50) and the fertilizer (5/6 - $250).

Now Bob decides to buy fertilizer from someone else. he once again pays $100 to hire the land, $100 for new tools and then buys fertilizer from seller for whatever the current exchange-value is for fertilizer (let's say it is another $100). After a few months he once again has a nice harvest which he manages to sell for $500. of this $500, $200 once again comes from the exchange-value of his tools and his land. the remaining $300 once again comes from the labor-time ($50) and fertilizer (responsible for $250 worth of additional crops), only this time the fertilizer is not his, but buyed from the seller. This fertilizer seller receives only $100, and Bob receives $200 in profit, while his labor-time contributed $50.

So this sellers fertilizer produced $250, but received $100. His fertilizer was worth $250, but his price was only $100. Why this difference? It is because paying for a fertilizer costs less than the value this fertilizer can produce in the time it is used. The price of fertilizers tends to converge towards the amount a seller needs to pay for all the needs to produce/obtain them, since anything less would mean that the seller wouldn't be able to sustain himself and wouldn't be able to keep selling fertilizers, and anything more would mean that the seller would eventually be able to hire some land and buy some tools himself. Now admittedly both cases occasionally happen, but if they happened structurally, all the time, for every seller, capitalism wouldn't be able to sustain itself. In one case all sellers would starve, in the other case all sellers would move up in the world and stop being fertilizer sellers.

So in capitalism, there is always a group of people who sells things (since they do not own their own means to use things they sell and will never receive enough in prices to get them), and the exchange-value for their things will always be less than the exchange-value for products resulting from using their things.

Has Bob exploited the fertilizer seller, since using product he sells (fertilizer), Bob obtained $200 (150 if you factor in $50 of his labor-time) in profit, but payed him only $100?
If not, how can Bob in your example exploit the labor seller, just because he did exactly the same - using product he sells (labor), Bob obtained $200 but payed him only $100?

[Maslo]

Imagine a farmer. Lets call him Bob.
Bob recently got his hands on some amount of money, say $200. He decides to use this to hire some land and grow some crops. He hires a plot of land for $100, buys the required tools for another $100 and starts his work. After a few months his land lease is over and all his tools are used up, but he has a nice harvest which he manages to sell for $500. Since the land and the tools he needed were worth $200 together and were completely consumed in the labor process, obviously this $200 has been transfered into the produced commodities. The remaining $300 is the result of his hard work, his labor-time.

Now Bob decides to hire someone to do the work for him. he once again pays $100 to hire the land, $100 for new tools and then hires a worker for whatever the current exchange-value is for labor-power (let's say it is another $100). He instructs this worker in the use of his tools and sets him to work. After a few months he once again has a nice harvest which he manages to sell for $500. of this $500, $200 once again comes from the exchange-value of his tools and his land. the remaining $300 once again comes from the labor-time, only this time the labor-time is not his, but of the hired worker. This worker receives only $100, and Bob receives $200 in profit without lifting a finger.

So this worker produced $300, but received $100. His labor-time was worth $300, but his labor-power only $100. Why this difference? It is because paying a worker costs less than the value this worker can produce in the time he's hired. The value of wages tends to converge towards the amount a worker needs to pay for all the food and bills for the time he is hired, since anything less would mean that the worker wouldn't be able to sustain himself and wouldn't be able to keep working, and anything more would mean that the worker would eventually be able to hire some land and buy some tools himself. Now admittedly both cases occasionally happen, but if they happened structurally, all the time, for every worker, capitalism wouldn't be able to sustain itself. In one case all workers would starve, in the other case all workers would move up in the world and stop being workers.

So in capitalism, there is always a group of people available for hire (since they do not own their own means of production and will never receive enough in wages to get them), and the exchange-value for their labor-power will always be less than the exchange-value for labor-time.

(note, I've been a little sloppy in my terminology. As others pointed out, price is not the same as exchange-value, but for the sake of simplicity I've assumed that they are the same.)

Great. Now substitute some labor (say 5/6 of it) with some other commodity necessary for production, for example fertilizer, to see how ridiculous LTV is in treating labor as special:

Bob recently got his hands on some amount of money, say $200. He decides to use this to hire some land and grow some crops. He hires a plot of land for $100, buys the required tools for another $100, obtains fertilizer from plant waste which multiplies his labor by 6 compared to working without it, and plants crops. After a few months his land lease is over and all his tools and fertilizer are used up, but he has a nice harvest which he manages to sell for $500. Since the land and the tools he needed were worth $200 together and were completely consumed in the labor process, obviously this $200 has been transfered into the produced commodities. The remaining $300 is the result of his work, his labor-time (1/6 - $50) and the fertilizer (5/6 - $250).

Now Bob decides to buy fertilizer from someone else. he once again pays $100 to hire the land, $100 for new tools and then buys fertilizer from seller for whatever the current exchange-value is for fertilizer (let's say it is another $100). After a few months he once again has a nice harvest which he manages to sell for $500. of this $500, $200 once again comes from the exchange-value of his tools and his land. the remaining $300 once again comes from the labor-time ($50) and fertilizer (responsible for $250 worth of additional crops), only this time the fertilizer is not his, but buyed from the seller. This fertilizer seller receives only $100, and Bob receives $200 in profit, while his labor-time contributed $50.

So this sellers fertilizer produced $250, but received $100. His fertilizer was worth $250, but his price was only $100. Why this difference? It is because paying for a fertilizer costs less than the value this fertilizer can produce in the time it is used. The price of fertilizers tends to converge towards the amount a seller needs to pay for all the needs to produce/obtain them, since anything less would mean that the seller wouldn't be able to sustain himself and wouldn't be able to keep selling fertilizers, and anything more would mean that the seller would eventually be able to hire some land and buy some tools himself. Now admittedly both cases occasionally happen, but if they happened structurally, all the time, for every seller, capitalism wouldn't be able to sustain itself. In one case all sellers would starve, in the other case all sellers would move up in the world and stop being fertilizer sellers.

So in capitalism, there is always a group of people who sells things (since they do not own their own means to use things they sell and will never receive enough in prices to get them), and the exchange-value for their things will always be less than the exchange-value for products resulting from using their things.

Has Bob exploited the fertilizer seller, since using product he sells (fertilizer), Bob obtained $200 (150 if you factor in $50 of his labor-time) in profit, but payed him only $100?
If not, how can Bob in your example exploit the labor seller, just because he did exactly the same - using product he sells (labor), Bob obtained $200 but payed him only $100?

[Tjis]

Has Bob exploited the fertilizer seller, since using product he sells (fertilizer), Bob obtained $200 (150 if you factor in $50 of his labor-time) in profit, but payed him only $100?
If not, how can Bob in your example exploit the labor seller, just because he did exactly the same - using product he sells (labor), Bob obtained $200 but payed him only $100?

No. The fertilizer merchant is not exploited because his fertilizer does not produce any extra value. In both the first and the second situation, Bob pays $100, and this $100 is transferred into the produced commodities. If he produces 100 cucumbers, each of them will be $1 more expensive because of the used tools (including fertilizer). They won't have $2 added value, because if Bob did that, any other cucumber producer would be able to undercut him. So fertilizer is unable to create any new value. It's value is merely transferred into the produced commodity.

But the worker does produce extra value. Bob paid Fred $100, but he produced $300.

[Maslo]

The fertilizer merchant is not exploited because his fertilizer does not produce any extra value.

The fertilizer multiplied the results of his labor by 6. It produced (added) $250. If there was no fertiliser, Bob would produce only $50 worth of corns instead of $300 with his labor.

Yet he payed the seller only $100 for the fertiliser.


But the worker does produce extra value. Bob paid Fred $100, but he produced $300.

Bob paid the fertilizer seller $100, but his product produced $250.

[Tjis]

The fertilizer multiplied the results of his labor by 6. It produced (added) $250. If there was no fertiliser, Bob would produce only $50 worth of corns instead of $300 with his labor.
This is actually not the case though. Improvements in a production process lower the price of the produced commodities, they don't raise them. If 6 times as much corn can be produced in the same amount of time with the same investment, then the value transferred into the produced commodities will be 1/6th of what it'd be if this better production method did not exist. If the new production process is more expensive than the old one, but can still produce far more, prices will fall as well.

This goes for the entire market. If Bob's competitor Mark uses a better fertilizer than Bob, then he is able to sell his products for a far lower price than Bob can, since he simply has to pay less money to produce more. Bob will be forced to sell his products for that lower price as well since otherwise he wouldn't be able to sell anything. Everyone would buy from the competition instead. This is also the reason why there isn't much handicraft around these days. Large-scale factory production is much cheaper.

So using better fertilizer, or better tools, or better whatever does not suddenly make this a value producer. The only thing that can produce new value is labor.

[Rafiq]

So under social capitalism with good welfare system (my proposed NIT BI), when there is no threat of poverty, wage labor is OK, just like selling other comodities at mutually agreed on price is OK.

Thats what I wanted to hear in the other thread! :)

LTV is illogical because it treats voluntary selling one specific commodity (labor) as something fundamentally different than selling other commodities (food, products, services..). That simply does not make sense. Restricting mutually voluntary contracts is immoral and totalitarian, no matter what or to who you sell.

Yeah and when you treat your slaves properly Slavery is OKAY. ?

[Revolution starts with U]

Maslo, do you support voluntary slavery? To tell someone he can't sell himself into perpetual slavery is totalitarian, no?

[CommunityBeliever]

Restricting mutually voluntary contracts is immoral

Workers are coerced into exchanging their labour-power at threat of poverty, homeless, starvation, and police harassment, as I mentioned here (http://www.revleft.com/vb/showpost.php?p=2232438&postcount=12). As such, this is not a voluntary relation.


So under social capitalism with good welfare system (my proposed NIT BI), when there is no threat of poverty, wage labour is OK, just like selling other commodities at mutually agreed on price is OK.Okay, lets assume that you *hypothetically* have managed to eliminate the inconvenience of unemployment using social programs. Then the selling of one's labour-power indeed would be a voluntary and comparable to other commodities.

The question still remains: why do you support capitalist class society, which involves the exclusive control over the means of production and capital, inherited over generations such as with the Rockefeller family (http://www.anonym.to/?http://en.wikipedia.org/wiki/Rockefeller_family), the Rothschild family (http://en.wikipedia.org/wiki/Rothschild_family), and the Walton family (http://en.wikipedia.org/wiki/Walton_family), etc?

This exclusive control, is still going to result in the concentration of vastly greater net worth in the hands of the capitalists due to taxes, debts, rent, utility bills, and other liabilities. This is an injustice.

Furthermore, the capitalist need to constantly accumulate capital contradicts the worker's social programs. One of these groups will have to win out (see class struggle), and if the workers don't take a revolutionary socialist approach they will lose out and their social programs will be eliminated. This is why social capitalism is a pipe dream, see for example, the British NHS:

http://www.cpgb-ml.org/index.php?secName=proletarian&subName=display&art=215

Britain’s NHS, which established health care as a right, has been progressively dismantled and privatised by successive governments over the past quarter-century. The story is of course not unique to Britain. Universal health care systems are being dismantled and privatised across the world. Making health care once again a commodity to be bought, rather than a right, has become the standard prescription of the World Bank, the International Monetary Fund, the World Trade Organisation, and even the World Health Organisation …


Social capitalism, which has actually existed in reality for many decades in many countriesAs mentioned previously, social capitalism whenever it has existed did so to temporarily placate class struggle. The ruling classes were worried about a working class revolt so they created social programs as temporary concessions.

Additionally, you have to consider that social capitalism only exists as a part of the global capitalist/imperialist system. The increasing conditions in these first world social capitalist countries are offset by worsening conditions and increased exploitation in third world, including the entire continents of Africa & South America.


produced highest quality of life on the planetSocial capitalism is not any more productive then liberal capitalism, because it uses the same mode of production. Socialism, on the other hand, is a new mode of production that will drastically improve our science & technology and get us out of this capitalist-onset technological dark age.

Social capitalism, is just capitalism with a nicer face on it. It creates the so called "highest quality of life on the planet" by creating a more equitable distribution of the products of capitalism, not increasing productivity.


But socialism, which has never actually existed (or only very temporarily) and is only a theoretical construction is not a pipe dream at all!See my contemporary forces of progress (http://www.revleft.com/vb/blog.php?b=6343) blog post. This describes real socialist success in Cuba, and the fact that there are still a several thriving revolutionary communist (Maoist) parties in the East.

Coordination Committee of Maoist Parties and Organisations of South Asia (http://en.wikipedia.org/wiki/Coordination_Committee_of_Maoist_Parties_and_Organ isations_of_South_Asia)
Naxalite-Maoist insurgency (http://en.wikipedia.org/wiki/Naxalite-Maoist_insurgency)


All you have pointed out is that capitalists will somehow corrupt the government over time, while ignoring that direct democracy I speak of is immune to that.Are you meaning to imply that direct democracy is compatible with capitalism? How does that work?


Not applicable to social capitalism. Capitalist never owns an employee, and employee is never dependant with his life (basic necessities) on employers money due to welfare (only for obtaining luxuries).Lets assume that is true, why do you still support/maintain the inherited exclusive control of the means of production, mainly in the hands of a few elite families?

[Judicator]

The worker sells her laboring power (labour-power) with a capitalist in exchange for her means of subsistence. The capitalist then has use of her productive capacity for a set period of time. In that period of time, she produces more than what is required for her subsistence. She gives the accumulated labor in the capitalist's possession a greater value than it had before. She has created surplus value (profit).

If you're actually interested in learning about this, see Value, Price and Profit (http://www.marxists.org/archive/marx/works/1865/value-price-profit/) and Capital (http://www.marxists.org/archive/marx/works/1867-c1/).
If the capitalist is making money off the marginal worker, why doesn’t the capitalist continue hiring? If I’m making $10 in “surplus value” when I pay a worker $5, I’m leaving free money on the table by not hiring. Are all capitalists this foolish in the Marxist view?
I sincerely appreciate the links, but If I just wanted a reading list I would have posted in OI learning.

The capitalist is not responsible for the well being of worker because there is nobody to hold him responsible.
By “responsible” I mean morally responsible, not does he, in fact, take responsibility. Do you understand the distinction?

I only apply the term "just" to the ends, not the means. The capitalist system as a whole is unjust not the individual capitalists.
Yeah I think we will just have to disagree and defer to another discussion. I find hardcore consequentialism problematic…you get issues like intent being completely irrelevant to the moral rightness or wrongness of an action.

But the workers don't get paid the value of each room they help prepare, they get paid hourly, so to increase exploitation, the bosses have fired one of the maids while still requiring the others to do the job, now they get paid the same hourly wage, and the price of the room is still the average value of the materials and labor, the maids are adding more value than they are paid for.
How would this be economically different from paying the maids per room cleaned, firing one of the maids, and reducing the wage per room cleaned? The math comes out the same either way.

Let me pose a question.
What is justice? Is it fairness, or something else? How does one determine "fairness"?
Probably something else, “fairness” often means distributive justice, which might be part of justice, but not all of it. What is justice probably warrants its own thread.

Wage slavery is a special case because of the fact that workers are forced into a job at threat of poverty. Poverty involves starvation, homelessness, and harassment from the police and the state among other things. This leaves the worker no choice.
Doesn’t Marx’s original conception of wage slavery require that the wage be exactly subsistence? Once you’re past subsistence, you can choose to do other things with your time (and still be alive).


I've already explained that, in the only post in this thread that you've ignored.

What are you responding to? This was in the OP and I don’t believe you quoted it, nor did I ask that question more than once.


What really influenced him was the specific use-value which this commodity possesses of being [I]a source not only of value, but of more value than it has itself.

If the capitalist stops hiring workers, despite the fact that hiring workers brings profit, he is leaving free money on the table. Is Marx really saying capitalists do this routinely? They seek profits always, except in the above case?


The seller of labour-power, like the seller of any other commodity, realises its exchange-value, and parts with its use-value. He cannot take the one without giving the other. The use-value of labour-power, or in other words, labour, belongs just as little to its seller, as the use-value of oil after it has been sold belongs to the dealer who has sold it. The owner of the money has paid the value of a day’s labour-power; his, therefore, is the use of it for a day; a day’s labour belongs to him. The circumstance, that on the one hand the daily sustenance of labour-power costs only half a day’s labour,

The marginal worker really isn’t all that productive. You could run a McDonald’s with 10 workers, but you hire 11 because the $5/hour justifies the extra profit you make. You will continue hiring until you expect to make zero extra profit from the next worker hired. This means the marginal benefit (use value?) equals marginal cost (exchange value?).
The daily sustenance of capital (rent and wear & tear) takes the other half.

My question to you is where does new value come from if you reject the Labor Theory of Value?
Technology, mostly. I find the LTV confusing and counter intuitive so I don’t know if I can even say I “reject” it. Specifically:
- Marx speaks of capital as “accumulated labor.” How is this economically helpful? Once the capital has been created, it exists independent of the costs incurred. You can think of it as standing apart from current labor…and the costs to produce it originally
- Why the distinction between exchange / use value?

Case in point:

During a meeting with my supervisor I was told I pulled in an average of several hundred dollars an hour for the company the previous week, yet I'm only paid 10 of those dollars. Hence I'm working for a tiny fraction of what I produce.
Convince a competitor to pay you $11?

[Veovis]

Convince a competitor to pay you $11?

That is a bullshit response on so many levels. Here are two reasons why:

There are no competitors available to me. I have limited transportation capabilities.

The employers dictate the terms because they hold all the power. Any attempts by the workers to negotiate on a level playing field (i.e. unionize) is met with harsh punishment. Hence, I earn less than a tenth of what I produce.

[CommunityBeliever]

Doesn’t Marx’s original conception of wage slavery require that the wage be exactly subsistence? Once you’re past subsistence, you can choose to do other things with your time (and still be alive).I am not sure what you are intending to convey with this statement. The wage is determined by the labouring necessaries need to produce, maintain, and perpetuate that labouring power (see here (http://www.revleft.com/vb/showpost.php?p=2232525&postcount=26)). This includes the physiological necessaries (subsistence).

[o well this is ok I guess]

Probably something else, “fairness” often means distributive justice, which might be part of justice, but not all of it. What is justice probably warrants its own thread. It's perhaps not as relevant as I thought. Let me try a new direction.
You say that it is fair so long as it adheres to market price, the general consensus for the rest seems to be a general distaste for determining fairness based on such.

But there can be no argument of such. Let us for a moment assume justice is a sort of fairness. From the point of view of the worker, there is certainly an injustice. Why should he, who creates all the goods, have such a small share in them? Why should the boss, who does not, have such a large share? But from the point of view of the boss, there too is an injustice. That is the value of their labour, as decided by the labour market. Even the creation of our goods must come with some definitive worth, and there it is. That is what everyone agrees you ought to be paid to create the goods. That is the value that has shown itself to strike the perfect balance between profitability and competitiveness. The boss and the worker, as you see, are poles apart.

What sort of argument can there be without address the question of what determines value and what exactly justice is? There can be no end to an argument that occurs with no common ground between two or more interlocutors. How can anyone say what spice will go best with an omelet if one does not even have a clear idea of what an omelet is? Or worse still, if one thinks that an omelet is actually an apple and another that an omelet is actually lemonade made with egg white instead of water.

[RGacky3]

I think fair compensation would be one democratically decided ... If CEOs are really worth that much, then the workers in the company would understand that and give them that pay.

[Maslo]

Yeah and when you treat your slaves properly Slavery is OKAY. ?

If by treating properly you mean release them any time they say they wish, then yes. The ONLY reason why slavery is bad is because its involuntary. Thats the definition of slavery actually.

[Maslo]

Maslo, do you support voluntary slavery? To tell someone he can't sell himself into perpetual slavery is totalitarian, no?

Perpetual voluntary slavery is an oxymoron.

But yes, telling someone he cant voluntarily sell himself into slavery-like contract, assuming he can leave it at any time without harm to his basic human rights, would be totalitarian and I would never support such a thing. I have no business in telling others what to do with themselves.

Do you think people are stupid and must be babysitted? They cannot decide what is good for themselves?

[RGacky3]

The ONLY reason why slavery is bad is because its involuntary. Thats the definition of slavery actually.

Actually no its not, you can also sell yourself into slavery and it still be slavery (and buy yourself out of it).


But yes, telling someone he cant voluntarily sell himself into slavery-like contract, assuming he can leave it at any time without harm to his basic human rights, would be totalitarian and I would never support such a thing. I have no business in telling others what to do with themselves.

Do you think people are stupid and must be babysitted? They cannot decide what is good for themselves?

No, but under Capitalism there is a giant power inbalance which means that workers do not own any capital, meaning they have to work for the owners of capital, who use that legerage to get an exploitative benefit from them, in that situation the workers do the best they can.

What we are saying is that is an unjust situation and unbeneficial for most people in society.

[Revolution starts with U]

Perpetual voluntary slavery is an oxymoron.

Well, that's funny considering it was the most often seen form of slavery throughout history, prior to the colonial era. I think it just further shows your ignorance of history, and the way the world works.



But yes, telling someone he cant voluntarily sell himself into slavery-like contract, assuming he can leave it at any time without harm to his basic human rights, would be totalitarian and I would never support such a thing. I have no business in telling others what to do with themselves.

If he could leave at any time it would not be slavery. Would you be against me selling myself into a lifetime slave contract? It's my body, and you would be totalitarian to stop it.



Do you think people are stupid and must be babysitted? They cannot decide what is good for themselves?

No, I don't think people are always stupid. Sometimes people are stupid, and sometimes they make individual decisions that have far reaching and unseen consequences for society; decisions like selling themselves into slavery. And then there are so many slaves, society decides to start letting you sell your children into it as well.
Remember, society is, no matter what, just an abstraction of individual actions. It's all subjective what is allowed and what isn't.
I could just as easily ask "what, do you think all people are jealous thieves? Why have property laws in the first place?"

[Maslo]

[QUOTE]The increasing conditions in these first world social capitalist countries are offset by worsening conditions and increased exploitation in third world, including the entire continents of Africa & South America.

Thats not true, spare me the white guilt crap. The conditions in the third world were always bad, and they vastly improved in the last 50 years. Not relative, but even absolute number of people in the third world living below poverty line has been steadily decreasing from 1950 to 2000, despite the fact that world population has multiplied almost 3 times during the time. So what worsening of the conditions?

http://www.worldhunger.org

I am sure local inhabitants prefer "exploitation" in capitalist factories over hard work in the fields, otherwise they would not leave them to seek employment in the factories. And what you consider low wage can buy you a lot in such countries, so thats relative.

If anything causes problems in Africa, its our foreign "help". Read what actual africans have to say about it:
http://www.spiegel.de/international/spiegel/0,1518,363663,00.html


Socialism, on the other hand, is a new mode of production that will drastically improve our science & technology and get us out of this capitalist-onset technological dark age.

Thats your wishful assumption. I think it will decrease the rate of technological progress and innovation, due to less incentives to do so. There is simply no reason why banning voluntary selling of labor and banning private ownership of the means of production would result in increased drive to innovate, and not decreased.


This describes real socialist success in Cuba, and the fact that there are still a several thriving revolutionary communist (Maoist) parties in the East.

You conveniently leave out that Cuba was relatively developed country before the Castro revolution, in fact it had higher standard of living and literacy rate than Spain at the time:

"In 1958, Cuba was a relatively well-advanced country by Latin American standards, and in some cases by world standards.[61] Cuba attracted more immigrants, primarily from Europe, as a percentage of population than the U.S. The United Nations noted Cuba for its large middle class."

Castro instituted some good reforms and I agree with some of his policies, but by far not all he did was beneficial. If he had not fucked up, Cuba could have been above US in all parameters relevant for standard of living, not just healthcare accessability, which is not much of a success since we know that US is the last developed country without comprehensive public healthcare system for the poor.

You of course also conveniently leave out many human rights abuses commited by your so called "forces of progress".

And Mao really? Do you also support Stalin or Hitler?


Are you meaning to imply that direct democracy is compatible with capitalism? How does that work?

Easily. You have direct democracy government - with the internet, this is the first time in history athenian direct democracy is practically possible on the level of nation states, AND capitalist economy. Why should it be incompatible? Would capitalism collapse suddenly without representative democracy government?


Lets assume that is true, why do you still support/maintain the inherited exclusive control of the means of production, mainly in the hands of a few elite families?

Thats a myth.

http://www.consumerismcommentary.com/most-wealthy-individuals-earned-not-inherited-their-wealth/

http://www.intelligenius.net/rich-people-who-were-born-poor/

http://blogs.wsj.com/wealth/2008/01/14/the-decline-of-inherited-money/

Yes, I would not support stealing. We can maybe talk about higher taxes on inheriting wealth, but I would not support stealing from those who earned their wealth on their own.

[Maslo]

Well, that's funny considering it was the most often seen form of slavery throughout history, prior to the colonial era. I think it just further shows your ignorance of history, and the way the world works.

There was nothing voluntary about it. If you can leave at any time, thats voluntary.


If he could leave at any time it would not be slavery.

Thats my point, finally you admitted it. So wage contract under social capitalism in not slavery, since you can leave at any time without external or internal forcing.


Would you be against me selling myself into a lifetime slave contract?

Lifetime slavery contract? Yes. Contract which has EVERY characteristics of slavery, except you can leave it anytime with no threat to your basic rights? No, do as you wish.

[#FF0000]

Yes, I would not support stealing. We can maybe talk about higher taxes on inheriting wealth, but I would not support stealing from those who earned their wealth on their own.

Unfortunately the very concept of private property involves theft by necessity.

[Judicator]

Maslo - there ain't enough room in this thread for the two of us :mad:


That is a bullshit response on so many levels. Here are two reasons why:

There are no competitors available to me. I have limited transportation capabilities.

The employers dictate the terms because they hold all the power. Any attempts by the workers to negotiate on a level playing field (i.e. unionize) is met with harsh punishment. Hence, I earn less than a tenth of what I produce.

I cannot speak to your particular circumstances (I don't know where you work, etc.) However presumably at some point people choose where to live, which carries with it things like transportation costs, labor market conditions, etc. The average American moves 12 times in his lifetime.

Employers don't dictate terms, markets do. Why are there some jobs that pay $12/hour but others that pay $8? It would seem foolish for any employer to keep paying $12/hour when he could get away with less, but he can't.


But there can be no argument of such. Let us for a moment assume justice is a sort of fairness. From the point of view of the worker, there is certainly an injustice. Why should he, who creates all the goods, have such a small share in them? Why should the boss, who does not, have such a large share? But from the point of view of the boss, there too is an injustice. That is the value of their labour, as decided by the labour market. Even the creation of our goods must come with some definitive worth, and there it is. That is what everyone agrees you ought to be paid to create the goods. That is the value that has shown itself to strike the perfect balance between profitability and competitiveness. The boss and the worker, as you see, are poles apart.

We have to distinguish between two things:
1) The empirical question - is the worker's labor the actual source of the economic value?
2) The normative question - is the process / outcome fair or just?

(1) is more what I'm trying to aim at with the OP question. It's misleading at best to say the worker creates all of the goods...workers, bosses, and capital providers are all involved in the creation of value. Competitive firms bring these 3 groups together and hire all of the factors of production (say skilled labor, unskilled labor, and capital) until marginal cost = marginal benefit.

(2) The question here is where the supposed injustice lies. You seem to think that the processes are unjust, but which ones? Is it unjust that the labor market determines wages based on product demand and labor supply? Is it unjust that people are born with different talents and have different upbringings? Is it unjust that consumers will pay more for certain things?


What sort of argument can there be without address the question of what determines value and what exactly justice is? There can be no end to an argument that occurs with no common ground between two or more interlocutors. How can anyone say what spice will go best with an omelet if one does not even have a clear idea of what an omelet is? Or worse still, if one thinks that an omelet is actually an apple and another that an omelet is actually lemonade made with egg white instead of water.

I thought for most LTV believers, Marxists, etc, labor and value and so on were very concrete concepts...the value being a function of the labor that goes into a product. So the idea would be that the value the worker was getting is, in a very literal sense, less than . This might be one way to approach the question in the title without appeal to justice.

But I do agree with your point that we have to at least sort of agree on justice to see if the system which generates prices and so on is just.

[CommunityBeliever]

/Dear Maslo, if social capitalism is a workable system, why do social programs always tend to collapse like the British NHS I mentioned earlier?


And Mao really? Do you also support Stalin or Hitler?I assume by that quote that you barely know anything about Mao except for perhaps what you heard in capitalist school (which always compares Mao, Stalin, and Hitler). For example, have you ever actually read any of Mao's works (http://www.marxists.org/reference/archive/mao/selected-works/index.htm)?


Thats a myth.Please explaining the following:

http://en.wikipedia.org/wiki/Walton_family
http://en.wikipedia.org/wiki/Rockefeller_family
http://en.wikipedia.org/wiki/Rothschild_family

I have concluded that capitalism is not a merit-based system. Capitalism rewards the ownership of capital, which is often inherited.

Democracy


Easily. You have direct democracy government - with the internet, this is the first time in history athenian direct democracy is practically possible on the level of nation states, AND capitalist economy. The "athenian direct democracy" was less democratic then the U.S today because they still had even greater class stratification, including a slave class consisting of much of their population, and women and minorities had no rights. So it was still just democracy for the upper class. The truth is that democracy is incompatible with class society. This has nothing to do with technologies such as the Internet, but rather due to social conditions.

To put it simply, everytime "democracy" has appeared in a class society, it has just been democracy for one class. In the case of modern society, we have democracy for the bourgeoisie. True democracy can only come about in a classless society (communism).


Why should it be incompatible? Would capitalism collapse suddenly without representative democracy government?First of all every society has a *ruling class*. The ruling class has exclusive political power, it controls the means of production, and it usually passes on its rule to its children.

Capitalism is the dictatorship of the bourgeoisie. The bourgeoisie is the ruling class. They control the means of production, the political system, and they use inheritance to pass on its class over generations.

Democracy is the dictatorship of the people. This is something distinct from captalism, since the capitalists no longer control the political power. Without political power, capitalism won't be able to exist and socialism will take its place.

Direct democracy = socialism

You might think this is a false dichotomy, and that there can capitalism without exclusive political power given to the bourgeoisie (like anarcho-capitalism?). Besides the fact that this has never existed before, the capitalists need state-protection, they need the police to protect their banks, control of the media, the military, etc. All these tools must be wielded by the capitalists in order for them to be victorious in their class struggle, so it is ridiculous to suggest that capitalists will be able to go without state control.

http://www.revleft.com/vb/why-capitalism-incompatible-t124072/index.html?t=124072

Freedom. Liberty. Equality. We Americans love to throw these buzzwords around in our rhetoric. We take pride in the fact that we are the most geopolitically powerful “democracy” on the planet. However, when our nation was initially conceived, it was far from being a place of freedom or equality. America began a racist, sexist, and economically stratified society in which political power was held exclusively by rich white male landowners. Only after a series of amendments to the Constitution did America become a place where people of both sexes and all ethnicities and classes had any say in how the country was run. Even after these reforms, there remains one major obstacle to America becoming a true democracy. That obstacle is capitalism.

If you are like most Americans, that last sentence may have surprised you. Capitalism’s advocates have done a fantastic job of conflating capitalism with freedom and democracy in average Americans’ minds. We’ve all heard praise of the wonders of “free markets”. Part of the reason for the confusion of capitalism and democracy is that many non-capitalist economic systems, for example that of many so-called “communist” nations, are indeed less free than capitalism. Yet that does not automatically make capitalist a totally free system. It is still oppressive and anti-democratic.

To understand why, we must define what democracy and capitalism are. Democracy is a system of government in which political power is possessed not by a handful of elite individuals, but rather by the masses. It is the people’s vote that determines how a society is governed. No other system of government grants its population greater political and social freedom.

Capitalism, by contrast, is a system in which the means of economic production are controlled by a hierarchy of powerful elites controlling a large number of workers. Those ranking higher on the capitalist hierarchy are considered “bosses”, and the highest-ranking of all are called “Chief Executive Officers” (CEOs for short). All others are laborers who can only hope they have enough stamina or ruthlessness to ascend the hierarchy to the point where they can boss their fellow workers around. However, these laborers cannot vote on what policies their superiors adopt. They are almost living in a dictatorship.

A system as hierarchical as the one I just described does not fit well with democracy, because by layers the masses cannot govern a society if they are being bossed around upon layers of bosses and CEOs. Common people do not possess much power in capitalism. They do not have real freedom, nor do they enjoy socioeconomic equality. Democracy promises those things. Capitalism is therefore incompatible with democracy.

“If capitalism is incompatible with democracy,” you ask, “then what economic system is compatible?”

I will surprise you again: the only economic system compatible with democracy is socialism.

World conditions


You conveniently leave out that Cuba was relatively developed country before the Castro revolution, in fact it had higher standard of living and literacy rate than Spain at the time:

What do you mean by "relatively developed"? Relative to what? Cuba was like most other neocolonial economies. Furthermore you "convientely leave out" that before the revolution Cuba was backwards and suffering from the dictatorship of Batista.


"In 1958, Cuba was a relatively well-advanced country by Latin American standards, and in some cases by world standards.[61] Cuba attracted more immigrants, primarily from Europe, as a percentage of population than the U.S. The United Nations noted Cuba for its large middle class."Nice quote from wikipedia (a very capitalist oriented site). Here is from Cubas own wiki site (translated from spanish):

http://www.ecured.cu/index.php/República_de_Cuba (http://www.ecured.cu/index.php/Rep%C3%BAblica_de_Cuba)

Socio-economic situation before 1959

Cuba had the typical situation of a neocolonial economy, backward and dependent. There were large estates sugar and livestock, with 75% of the land in the hands of 8% of the owners. The unemployment rate sometimes exceeds 25% of the workforce, with more than 600 000 unemployed in the period between harvests (dead time). Only 12% of the workforce was female. 47% of the house was in deplorable condition or bad, and only 33% were of masonry. 20% of the richest received 58% of income while the poorest 20% perceived the 2%.

But have the highest per capita private car in Latin America , 45% of children 6 to 14 years not attending school, and 23.6% of the population over 10 years were illiterate. The population aged 15 years had an average educational level of less than 3 degrees. Paradoxically, there were over 10 000 unemployed teachers. The state health service was totally inadequate and low quality. The capital of the country, with 22% of the population, provided 65% of physicians and 62% of hospital beds.

In general, conditions in rural areas were much more critical: only 4% eat meat, 43% of the population were illiterate, only 8% received free medical care, while 36% was parasitized and 14% suffered or had suffered from tuberculosis .


Thats not true, spare me the white guilt crap. The conditions in the third world were always bad, and they vastly improved in the last 50 years. Not relative, but even absolute number of people in the third world living below poverty line has been steadily decreasing from 1950 to 2000, despite the fact that world population has multiplied almost 3 times during the time. ?What do you mean by "white guilt crap"? Do you deny the imperialist exploitation of the third world?

Just look at Africa - it has a very small population density, and much of the greatest sources of natural resources in the world, yet it is the poorest area in the world. Africa is clearly exploited, and you can see something similar in most of the rest of the "undeveloped world."


So what worsening of the conditions
The worsening conditions and increased exploitation in the last twenty years as a part of the economic stagnation/global recession. A part of this is the the imperialist "war on going on in Iraq, Afghanistan, Libya, Yemen, etc.

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The next factor is the increasing pollution in the world, of which the third world has suffered the most. Chemicals and other products are disposed off on third world countries:

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Technology


Thats your wishful assumption. Even if socialism didn't increase productivity, if it just didn't hinder technological progress by creating things like the AI winter (http://en.wikipedia.org/wiki/AI_winter) and proprietary software (http://en.wikipedia.org/wiki/Proprietary_software) then that would be a huge improvement. I described many more examples of techno-deprecation in the previous thread.


I think it will decrease the rate of technological progress and innovation, due to less incentives to do so. There is simply no reason why banning voluntary selling of labor and banning private ownership of the means of production would result in increased drive to innovate, and not decreased.Didn't you already see this video on the "profit motive"?

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I think the idea that the "profit motive" is even remotely helpful for technological progress doesn't reflect the nature of human psychology. The purpose motive makes much more sense.

Besides, we could maintain some sort of profit motive in some sort of socialist system if it was worth it, that has nothing to do with capitalism since capitalism is based upon profiting off capital, not upon rewarding innovators.

[Judicator]

CommunityBeliever - isn't your post long enough to warrant its own thread?

[dodger]

"Once upon a romantic day Sir Ector made his way to a tournament accompanying his son, Sir Kay and his ward Arthur. Calamity! Sir Kay, a careless young knight, realised he’s forgotten his sword and the jousting was about to begin. Arthur, acting as Kay’s squire, rode off in search of a suitable weapon, conveniently finding one apparently abandoned in a local churchyard. True the blade has been driven half its length into the middle of an anvil securely fixed on top of a great rock. Not knowing many a knight has already proven himself too feeble to extract the sword from this eccentric fixing, Arthur leapt up onto the stone and with little effort plucked the sword free. The rest, as the cliché runs, is history.
Except, of course, it is not history. Or is it? Set aside the soft focus romance and the idealism of an age of perfect chivalry and examine the material components of the story instead. The essential elements, in ascending order, are the rock, the anvil and the sword. Now consider Arthur, not as a medieval template of perfect Christian kingship or even as a 6th Century Celtic warrior leading his tribe against insurgent Saxons. Rather an Arthur whose power arises from a magical ability, a man who can work metal.
Arthur, the protégé of Merlin, personifies what once was a mysterious practice, iron production. What is now taken for granted as a common industrial process was regarded as having supernatural overtones. Having made Sirs Ector and Kay redundant and incorporating Merlin as representing secret knowledge only revealed to a few, an Arthur emerges who can do wonderful things.
Firstly, he takes the rock, or iron ore as it known today, and heats it until the metal it contains becomes molten and flows out. Once this smelting has taken place, the resulting brittle iron is heated and reheated by Arthur who repeatedly hammers the red-hot ingot on his anvil, driving out the impurities. Maybe he introduces a little carbon to transform the emerging wrought iron into steel. This continues to be shaped on the anvil into a blade that can be honed on a whetstone. Arthur has drawn the sword from the stone.
In doing so he has created not only a fine weapon, but something the sword has in common with everything that’s ever been made through human agency however grand or mundane: value. At every stage of the process value is added. The iron ore has no value to humanity while it remains undisturbed rock, but along comes the miner who extracts it from the earth and that lump of stone has acquired value; it can be sold. Arthur, acting as the personification of all metalworkers, then goes through each of the subsequent stages. Smelted, cast, wrought, made into steel, pommel and hand guard fashioned, grip affixed to the hilt, blade honed keen and polished; each stage adds to the value of the finished implement. Which is why common foot soldiers of those days were armed with spears, being cheaper to make than swords requiring much more work in their manufacture.
And it is work that is the crucial element, labour measured by time. Two types of labour actually, direct and indirect. The direct labour was the work required by Arthur to properly complete each part of the process by which he drew the iron from the stone and fashioned it into a sword. There was also his indirect labour, that is the previous years of apprenticeship spent learning and developing the skills required to successfully work iron. There was also the miners’ labour-time and that of the charcoal burners who produced the purer fuel from wood required for smelting. All that labour accumulated as the value of the finished sword demonstrating, even in dark ages, the importance of the light Marx shone to illuminate the universal source of value."

Posted by IMARXMAN on his site which if I had read it some 30years ago would have saved many a long night wrestling with that knotty problem....Don't expect WALT DISNEY will have exactly the same take on the Arthur legend.....