Bourgeois justifications of exploitation

[Jadan ja]

As a response to Marxist theories of exploitation, bourgeois economists attempted to justify the unearned incomes and present them as something that really belongs to capitalists.

If I understood those theories correctly, those economists do not deny that all wealth is produced by labour, but they are just trying to justify redistribution of some of that wealth to those who did not create it but in some other way helped to create that wealth.

They usually claim that interest is a reward to capitalist for not consuming his wealth a certain period of time. Not consuming makes possible for someone else to consume wealth before he or she created his wealth (in other words it is preferable for him to consume wealth now, before he has created an equivalent, than later, after he or she creates that wealth). Therefore, he has to reward an owner of that capital by giving him interest.

Profit, in their views, is a reward for taking risks. Before production it is unknown what is going to be the total gain form selling all the products that were produced. So when a capitalist buys all the materials that are required for production, he does not know will the gain from selling the products be greater or smaller than the cost of those materials. He also pays wage to his workers before they actually "create a difference" between the product and materials. If the difference they created is greater than their wage, the capitalist exploits the worker. But if the difference is less than the wage the worker received, can we say that the worker exploited the capitalist? If I understood their theories correctly, those economists believe that this means that capitalism is a fair system.

I think that there are lot of problems with both their attempt to justify interest and their attempt to justify profit, but I would like to hear the opinions of others before posting my thoughts.

Please post as many different views on this as possible, post links to as many different essays on this topic as possible.

[bloody_capitalist_sham]

Well, it can never be a fair system. Exploitation is guaranteed for working class people, because capitalists own property.

The working class do not, so have no opportunity to make profits ect.

The existence of a class system, imo, undermines their arguments totally. At least for communists.

The ownership of property is the source of exploitation, the amount of profit made from each worker is just a feature of capitalism.

[anomaly]

Do you know what economists are? They are bourgeoisie. Not just in their views, sometimes.

As such is the case, I'm never surprised that they try and defend the distribution of wealth in capitalist society. Because, from their perspective, it is 'fair'--they get shitloads of cash while we get jack squat!

[LSD]

If I understood those theories correctly, those economists do not deny that all wealth is produced by labour

I'm afraid you've understood incorrectly.

Bourgeois economists not only deny the labour theory of value, they do so emphatically. And, frankly, they have a point.

Within a capitalist market system, all wealth is not created by labour. All wealth stems from labour, but its far more complex than a straight correlation.

And, as far as mainstream economists, there isn't even a primary relationship.

Classical economists will tell you that labour is one of the "factors of production", but that it is only important in the supply-side of the economic calculation, not the demand one.

So, accordingly, a worker who makes a product did not "create" its "value" because he did not chose the product to make or the method of making it. Those were the result of the other units of production (capital, resources, entrepeneurship, etc...). The man who hired that worker contracted him to do a job and payed him in exchange.

The potential value of that product is "irrelevent" as it was the result of several "productive factors". The worker was "no more responsible" for making it profitable than the piece of machinary that he used.

After all, by their figuring, value is determined solely by market pressure and so, regardless of the work that went into an item, its value emerges solely from how many people want it and how much they want it.

How these people came to wanting it is irrelevent as is who is responsible.

When a diamond company sells a particularly expensive diamond was it the African who mined it, the pilot who shipped it, the cutter who shapped it, the jewler who set it, or the salesman who sold it that determined is high price?

And what about the multinational corporation that oversaw the whole operation; what about the African government that liscensed the initial dig; what about the advertising firm that made diamonds fashionable; and what about the diamond house that keeps diamond saturation low?

Surely all of these must have played some part in determining the ultimate "value" of the stone in question, and while we could certainly debate exactly how many of these items are truly "market"-derived and how many simply reduce back to labour, to the bourgeois economist, it doesn't matter.

All of them are covered under the heading of "production" and need no further study. In the world of economics, the "way a thing is made" is completely unrelated to its worth.

Finally, "Wealth" is merely an accumulation of capital, it has no "status" within the classical economic model. People make money when they enter into transactions that get them more than they give. In other words when their perception of value is superior to that of someone else's.


They usually claim that interest is a reward to capitalist for not consuming his wealth a certain period of time.

No, actually they don't think in those kind of terms at all.

"Reward", "wealth", "capitalist", these are all nonsense terms to them. As far as they are concerned, interest, like all other economic transactions is about nothing more than exchange.

The person who invests the money gives the investee temporary power over money and in exchange they are given remuneration.

It's all about contractual property exchange, nothing more. Economists do not ever consider the "big concepts" involved in capitalism, they restrict themselves to superficial analyses.

Whether or not capitalism is actually really predicated on fair exchanges and whether or not real people are truly free agents in a disperic envionment doesn't matter to them. So long as their graphs tell them that supply and demand are independent variables, that's what they'll believe.


Profit, in their views, is a reward for taking risks.

Well, actually, again "reward" is a non-item for them.

Profit is merely the successful completion of an economic transaction. If one has managed to achieve a higher market price for an item than the cost of its production then one has been economically successful and so now has an excess of capital.

Again, there are no "big concepts" involved.


He also pays wage to his workers before they actually "create a difference" between the product and materials. If the difference they created is greater than their wage, the capitalist exploits the worker. But if the difference is less than the wage the worker received, can we say that the worker exploited the capitalist? If I understood their theories correctly, those economists believe that this means that capitalism is a fair system.

To the economist, there is no "exploition" in an economic relationship. Indeed, as they see it, in true capitalism, exploitation is fundamentally impossible because all exchanges are voluntarily contracted.

If a worker "chooses" to take a job for a certain wage then he has "freely volunteered" to make a product. The value of that product on the free market is immaterial to the wage that the workers is paid because, again, labour is merely a "factor of production" and nothing more.

If an owner miscalculates and operates at a loss, then he has been unsuccessful in his attempts and has misread the market. There is no "punishment" involved however, he has just made a mistake.

By bourgeois reckoning, he now has "more to lose" than the workers he subsequently lays off because he "invested" in the business whereas they were merely hired by it.

Again, it's all about exchange to them -- two people making a deal. That's the paradigm they operate from and once you understand that, the rest extends from it.

Bourgeois economics is actually quite simple, you just got to get over the somewhat irritating fact that it bears no relationship to the real world.

After all, it doesn't seem to bother them! :lol:

[anomaly]

Thanks a lot, LSD, for taking me back to first semester economics class. :lol:

Torture, that's what it was, torture.

[LSD]

:lol:

Hey, I did major in commerce at college, I might as well make some use of it!

[Entrails Konfetti]

Can someone explain this to me:
With most products, you pay the exchange value for the commoditie first to realize its use-value; with labour-power you are paid after your use-value is realized. However with banks you pay them back with interest, the use-vale, then the exchange topped with payments of surplus.

So howcome that capitalist doesn't pay the worker interest?

[LSD]

Firstly, EK, your parallel is flawed.

The service that the bank is offering is time. The "use-value" of a bank's service (I assume we are talking about loans here) is not merely the money they lend to you, but the time you are given before you must repay it.

Interest is merely remunerating the bank for the time that it must be without its money.

In the case of the worker, however, the contract is with regards to labour and so wage is dependent on time spent plus labour-value. That means that a more skilled workers is payed more than a less skilled one for the same number of hours.

In classical economic terms, you see, the worker is not giving anything to the employer and so no interest is due.

In terms of why the workers is payed after his labour instead of before it, that's merely for practicality's sake (not to mention tax purposes).

The worker and the boss establish a "long-term relationship" and as such "trust" one-another sufficiently and have enough checks on one-another to assure that the other will not "split and run".

It's much like how you pay your monthly rent after you use the appartment and not before it.

Again, it's just about looking at everything as an "exchange" and figuring out what we be most "convienient" in that paradigm.

[Entrails Konfetti]

Originally posted by [email protected] 16 2006, 09:27 PM
Well, actually, again "reward" is a non-item for them.
You do actually hear some capitalists claim its a "reward".
I never understood that logic either. In order for them to buy a product they don't have, they have to sell their product. Its not a question of reward, it how their system of transactions work.

Who in the right mind would want to be stuck with billions of bussells of apples, and not own a house.

Thankyou for answering my question that was on the "Having the knowledge to exploit hasn't a set value" thread. They typically just don't acknowledge reallity.

[LSD]

You do actually hear some capitalists claim its a "reward".

Well, those tend to be the moralistic types who are trying to make their participation in a capitalist system "fit" with their "ethical" world-view.

Especially if they happen to be Christian or otherwise seriously religious, economic exchange is a little more "dry" than what they're comfortable with. Accordingly, they try and justify their deviation from spritual orthodoxy by imagining that capitalist exchanges are actualy "rewards" for "good deeds".

That makes the whole thing seem more relgiously "compatible".

Serious economist, however, don't buy into any of that crap. You see the real capitalists are just as rational as any of us. That's what makes them so dangerous! :o

[bezdomni]

The justification for imperialism that I usually hear is:
"They are better off than they would be without American corporations".

I don't even think I need to address the problems of this.