Argument Against Profit Motive?

[redtex]

Could someone post an easy to understand argument against profit motive? Maybe even a link to a YouTube video?

[Tim Cornelis]

Are you talking about "profits" in general, or "profit motive" specifically?

The case against profits in general is that profits are superior to human needs in a capitalist market economy.

Profit motive as means of stimulating innovation is counter productive: http://www.youtube.com/watch?v=u6XAPnuFjJc

[socialistjustin]

Anwar Shaikh wrote a paper called "The First Great Depression in the 21st Century" that deals with this issue. Like most papers, its filled with economic jargon and graphs, but its not a hard read.

[redtex]

That's a pretty cool video. It answered some questions. I will look up that paper as well.

I'm asking about profit motive specifically. You know how pro-capitalism folks say that under communism there is no motivation to do anything without profit to motivate people.

[Broletariat]

That's a pretty cool video. It answered some questions. I will look up that paper as well.

I'm asking about profit motive specifically. You know how pro-capitalism folks say that under communism there is no motivation to do anything without profit to motivate people.


I've always loved to quote Kropotkin on this matter.




The objection is known. "If the existence of each is guaranteed, and if the necessity of earning wages does not compel men to work, nobody will work. Every man will lay the burden of his work on another if he is not forced to do it himself." Let us first remark the incredible levity with which this objection is raised, without taking into consideration that the question is in reality merely to know, on the one hand, whether you effectively obtain by wage-work the results you aim at; and, on the other hand, whether voluntary work is not already more productive to-day than work stimulated by wages. A question which would require profound study. But whereas in exact sciences men give their opinion on subjects infinitely less important and less complicated after serious research, after carefully collecting and analyzing facts, on this question they will pronounce judgment without appeal, resting satisfied with any one particular event, such as, for example, the want of success of a communist association in America. They act like the barrister, who does not see in the council for the opposite side a representative of a cause, or an opinion contrary to his own, but a simple adversary in an oratorical debate; and if he be lucky enough to find a repartee, does not otherwise care to justify his cause. Therefore the study of this essential basis of all Political Economy, the study of the most favourable conditions for giving society the greatest amount of useful products with the least waste of human energy, does not advance. They limit themselves to repeating commonplace assertions, or else they pretend ignorance of our assertions.



What is most striking in this levity is that even in capitalist Political Economy you already find a few writers compelled by facts to doubt the axiom put forth by the founders of their science, that the threat of hunger is man's best stimulant for productive work. They begin to perceive that in production a certain collective element is introduced which has been too much neglected up till now, and which might be more important than personal gain. The inferior quality of wage-work, the terrible waste of human energy in modern agricultural and industrial labour, the ever growing quantity of pleasure-seekers, who to-day load their burden on others' shoulders, the absence of a certain animation in production that is becoming more and more apparent; all this begins to preoccupy the economists of the "classical" school. Some of them ask themselves if they have not got on the wrong track: if the imaginary evil being, that was supposed to be tempted exclusively by a bait of lucre or wages, really exists. This heresy penetrates even into universities; it is found in books of orthodox economy.



This does not hinder a great many Socialist reformers to remain partisans of individual remuneration, and defending the old citadel of wagedom, notwithstanding that it is being delivered over stone by stone to the assailants by its former defenders.



They fear that without compulsion the masses will not work.



But during our own lifetime have we not heard the same fears expressed twice? By the anti-abolitionists in America before Negro emancipation, and by the Russian nobility before the liberation of the serfs? "Without the whip the Negro will not work," said the anti-abolitionist. "Free from their master's supervision the serfs will leave the fields uncultivated," said the Russian serf-owners. It was the refrain of the French noblemen in 1789, the refrain of the Middle Ages, a refrain as old as the world, and we shall hear it every time there is a question of sweeping away an injustice. And each time actual facts give it the lie. The liberated peasant of 1792 ploughed with a wild energy unknown to his ancestors, the emancipated Negro works more than his fathers, and the Russian peasant, after having honoured the honeymoon of his emancipation by celebrating Fridays as well as Sundays, has taken up work with as much eagerness as his liberation was the more complete. There, where the soil is his, he works desperately; that is the exact word for it. The anti-abolitionist refrain can be of value to slave-owners; as to the slaves themselves, they know what it is worth, as they know its motive.



Moreover, Who but economists taught us that if a wage-earner's work is but indifferent, an intense and productive work is only obtained from a man who sees his wealth increase in proportion to his efforts? All hymns sung in honour of private property can be reduced to this axiom.
For it is remarkable that when economists, wishing to celebrate the blessings of property, show us how an unproductive, marshy, or stony soil is clothed with rich harvests when cultivated by the peasant proprietor, they in nowise prove their thesis in favour of private property. By admitting: that the only guarantee not to be robbed of the fruits of your labour is to possess the instruments of labour--which is true--the economists only prove that man really produces most when he works in freedom, when he has a certain choice in his occupations, when he has no overseer to impede him, and lastly, when he sees his work bringing in a profit to him and to others who work like him, but bringing in nothing to idlers. This is all we can deduct from their argumentation, and we maintain the same ourselves.


As to the form of possession of the instruments of labour, they only mention it indirectly in their demonstration, as a guarantee to the cultivator that he shall not be robbed of the profits of his yield nor of his improvements. Besides, in support of their thesis in favour of private property against all other forms of possession, should not the economists demonstrate that under the form of communal property land never produces such rich harvests as when the possession is private? But it is not so; in fact, the contrary has been observed.



Take for example a commune in the canton of Vaud, in the winter time, when all the men of the village go to fell wood in the forest, which belongs to them all. It is precisely during these festivals of toil that the greatest ardour for work and the most considerable display of human energy are apparent. No salaried labour, no effort of a private owner can bear comparison with it.



Or let us take a Russian village, when all its inhabitants mow a field belonging to the commune, or farmed by it. There you will see what man can produce when he works in common for communal production. Comrades vie with one another in cutting the widest swath; women bestir themselves in their wake so as not to be distanced by the mowers. It is a festival of labour, in which a hundred people do work in a few hours that would not have been finished in a few days had they worked separately. What a sad contrast compared to the work of the isolated owner!



In fact, we might quote scores of examples among the pioneers of America, in Swiss, German, Russian, and in certain French villages; or the work done in Russia by gangs (artels) of masons, carpenters, boatmen, fishermen, etc., who undertake a task and divide the produce or the remuneration among themselves, without it passing through the intermediary of middlemen. We could also mention the great communal hunts of nomadic tribes, and an infinite number of successful collective enterprises. And in every case we could show the unquestionable superiority of communal work compared to that of the wage-earner or the isolated private owner.
Well-being, that is to say, the satisfaction of physical, artistic, and moral needs, has always been the most powerful stimulant to work. And when a hireling produces bare necessities with difficulty, a free worker, who sees ease and luxury increasing for him and for others in proportion to his efforts, spends infinitely far more energy and intelligence, and obtains first-class products in far greater abundance. The one feels riveted to misery, the other hopes for ease and luxury in the future. In this lies the whole secret. Therefore a society aiming at the well-being of all, and at the possibility of all enjoying life in all its manifestations, will supply voluntary work which will be infinitely superior and yield far more than work has produced up till now under the goad of slavery, serfdom, or wagedom.

[Hoipolloi Cassidy]

I'm writing a short article about "Demand-Side Economics." Surprise, surprise, long before Von Mises and crew were arguing that there's only one dynamic, "greed," anthropologists and theorists ranging from Hobbes to A. Smith to Engels to Max Weber to Marcel Mauss were actually evaluating how "economic exchanges" function in the real world.

I'll post the article here when I'm done.

[Hit The North]

I've always loved to quote Kropotkin on this matter.


You mean you quoted the entire lot? Off the top of your head? Good work! :)

The main argument against the profit motive as the primary, or most commonly held motivation for hard work, is that the vast majority of work does not involve a profit. In the capitalist mode of production only the capitalist makes a profit. Everyone else works hard for wages.

A key argument against the ethics of profit is that the profit of capitalists is created on the basis of the exploitation of their wage labourers and this process is on the basis of an enforced inequality.

[Broletariat]

You mean you quoted the entire lot? Off the top of your head? Good work! :)

I wish, I do tend to be able to quote assloads of one liners and slip them into debates irl and such.

[socialistjustin]

That's a pretty cool video. It answered some questions. I will look up that paper as well.

I'm asking about profit motive specifically. You know how pro-capitalism folks say that under communism there is no motivation to do anything without profit to motivate people.

Well the paper is more about how the profit motive relates to this crisis so I am not exactly sure it would be what you are looking for. Still might be useful though I dunno.

[Ocean Seal]

The profit motive is shortsighted, it doesn't actually help anyone and it prevents us from fully using all of our resources properly. Case in point, if it weren't for the profit motive we could feed the whole world ten times over, but instead we chose to throw food out to keep prices high. Now why would we want to do that? Profit motive?

[redtex]

Well the paper is more about how the profit motive relates to this crisis so I am not exactly sure it would be what you are looking for. Still might be useful though I dunno.

I could only find a paid subscription site where that paper was.

I guess what I'm getting at is that capitalists say that profit is what guides them to know what is the most efficient use of resources. It's the all knowing "invisible hand of the market". They make more profit when they most efficiently use resources.

Capitalists say they get punished by making no profit if they make things that people don't want, and rewarded when they make things people want. Therefor profit motive is good because it makes capitalists do what people want.

Also, capitalists say profit motive causes innovation. Capitalists are rewarded when they invent something new and useful. Supposedly without profit they wouldn't do these things. That video Goti posted answered this nicely.

[Jimmie Higgins]

I guess what I'm getting at is that capitalists say that profit is what guides them to know what is the most efficient use of resources. It's the all knowing "invisible hand of the market". They make more profit when they most efficiently use resources.Yes they say this, but it isn't correct. How is clear-cutting forests or fishing a lake until there aren't enough fish to make a profit an efficient use of resources. It's the quickest way to turn a buck, but it's not efficient at all.

The housing collapse and the whole crisis of overproduction is reality throwing this argument back in the faces of the apologists. The profit motive created bubbles which then destroyed large amounts of wealth and hurt hundreds of thousands of people... it even hurt some capitalists, but since the ones that come out on top increase their power in the market, the remaining ones are able to sit on the money made in the bubble and give their execs bonuses.

So inefficiency is built into the system, there's nothing efficient about letting houses you built sit empty because you can't sell them at a profit even though tons of people need housing.

In Marxist terms (and actually classical capitalist terms too) it's the difference between the exchange value and use value.


Capitalists say they get punished by making no profit if they make things that people don't want, and rewarded when they make things people want. Therefor profit motive is good because it makes capitalists do what people want.Again, it's exchange value, not use value that guides the market. So while lots of people need homes and few people need yachts, right now it's yachts that are turning a profit and home construction that's stagnated... it has everything to do with profits, not human needs.


Also, capitalists say profit motive causes innovation. Capitalists are rewarded when they invent something new and useful. Supposedly without profit they wouldn't do these things.Again, things are produced if they are profitable - people need cheap aids drugs, but instead the pharma industry is producing glorified pep-pills and Viagra analogues.

Necessity is the mother of invention, not the profit motive and people have been innovating things to make their lives better since long before capitalism. If workers ran their workplaces and society, then there would still be an organic incentive to innovate because there would be a desire to make labor less intensive and as pleasant as possible while still meeting real popular needs through production.

[redtex]

Thanks Jimmie! I wish I could hit that "Thanks" button a few more times. I feel like I can understand things a little clearer now.


So inefficiency is built into the system, there's nothing efficient about letting houses you built sit empty because you can't sell them at a profit even though tons of people need housing.

In Marxist terms (and actually classical capitalist terms too) it's the difference between the exchange value and use value.

Exchange value and use value. Right, it's often baffled me why things of similar *use value* sometimes widely differing *exchange value*. Like designer jeans vs just regular jeans. Now I have words I can apply to that case.


Again, things are produced if they are profitable - people need cheap aids drugs, but instead the pharma industry is producing glorified pep-pills and Viagra analogues.

A very good example. I guess most people who have AIDS don't have a lot of money to spend, so they make drugs that people who have excess money will buy. Obviously, life-saving AIDS drugs have more *use value*.

Thanks again. I learned a lot.