Borincano
19th May 2002, 07:33
Theories on Wage/Worker Relationships
by Luis Orlando Gallardo Rivera
www.reddemcee.com
(I didn’t write this article, it’s an online buddies.’)
In The Twilight of Capitalism, Michael Harrington states that “money is not, in and of itself, capital.” “Something”, he continued, “must happen before it is transformed from a medium of exchange into a power that yields a profit.” Stressing their relationship, he attempts to explain how money becomes capital. Harrington states that
If equals were exchanging the products of their labor – if, say, two independent farmers were dealing with each other – then money would function as a means of payment. But it is only when there is an exchange between historically specific kinds of unequals, between capitalists and workers, that the possession of money allows the former to “make” more money form the labor of the later. So a social class relationship, itself the product of a long history, is the precondition for turning money into capital.
In a later chapter, Harrington notes how the worker “often thinks that he is paid sixty minutes of every hour and is unaware that he is contributing unpaid labor to his employer part of the time.” It is easy to think of an under-paid Third World worker or a slave to be “exploited”, but it wasn’t until I reviewed these lines that it struck me that nearly all of us are exploited. We will work for a set wage while the fruits of our toil will be worth much more. For example, a shoe worker might get paid $5 an hour but will hourly produce $100 worth of shoes. The rest of the $95, after paying for expenses, will end up in the pocket of the owner of the shoe factory, as we all pretty much know. But if you take the time to think about it, the worker’s labor is not worth $5, but $100. If the result of the labor equals more than what the worker is putting into it, then you have exploitation. He’s literally being jipped for $95 and much like with David Ricardo’s labor theory, the capitalist takes the same position as the “parasitic landlords who [do] nothing but collect rent.”
“Can one imagine an American or Soviet official economist announcing that the growth in G.N.P. has been higher than usual because we were successful in extracting more unpaid time from the people?” This is exactly what’s happening. Bob Brown mentions in his article Greed is Good: Phasing in Phasing out how “instead of lowering the prices on DVD’s as manufacturing costs reduce along with increased sales, they [DVD marketers] intend to jack the prices up as far as they possibly can.” In the private market, money cannot be made without someone being literally screwed over. Whether it be the country that is not getting paid for their natural reserves of fossil fuels and resources, the worker who’s wages are less than the value of the labor, or the consumer who purchases products for 1,000s of times more than what it costs to manufacture them, we all tend to be taken advantage of. The purpose of this essay is to suggest some random ideas and theories on how the work place can be reformed to minimize this problem (and specifically that of unpaid labor time.)
So how do we cure this unpaid labor time? Well, there are two ways to run a relationship between the wages, labor, workers, and their products without the exploitation:
(1) Pay a worker the value of his labor. If a worker’s labor produces about $500-worth of products an hour, then he deserves his $500 an-hour wage (minus costs for the maintenance and purchase of tools and machinery). This alternative labor ethnic is generally in favor of the worker. A negative side effect includes the following; if one worker manufactures ten products, each with a price tag of one dollar, and only nine sell, than the value of his hourly labor is not $100 but $90. In this case, the wages of the worker are directly dictated by the demand and sales of the products that he produces. As the demand rises or lowers, the worker’s wage follows the same pattern. Two workers who do the exact job at two different factories could possibly receive two different wages depending on how well their company sells the products.
(2) Charge the consumer according to the wage of the worker. Say one worker is being paid $5 an hour and produces one item worth about $20. The cost of the consumer item could be dropped to $5 (not including the costs for shipping, packaging, etc.). This alternative labor ethnic is generally in favor of the consumer. Much like in the previous suggestion, there is also a negative side effect: the wages of this type of worker are not moderated by market prices (in fact, the opposite is true) so a drop in product sales will result in debt for the factory.
Either of these, or a mixture of the two, could be implemented to decrease and eliminate the exploitation of a worker or producer. A mixture of a combination of the two and layoffs could counter each of their negative side effects. One must note that it is not always as simple to calculate the true labor value with production and industrial workers as it is with employees in fields such as retail, maintenance, and other non-producing industries. A plumber cannot be paid according to the total value of all products that he has fixed (why hire a plumber when new pipes and sinks could be bought?) and a retailer cannot be paid the value of the items that he sold (otherwise the store would have to artificially increase the item’s price by 100% to pay for wages). Of corse there are countless other matters to take into account – deducting wages from workers to pay for manufacturing costs and raw materials – but in this essay I attempt to sum up the problem and possible alleviations in their simplist form. These issues will be tackled in later writings.
Running a business using either of the two proposals is the only way to run a work place without exploiting the workers. It is highly doubtful that private enterprises would carry on such policies, for managers, company executives, and CEOs would no longer be receiving their hefty paychecks. The only way either of these suggestions could be carried out would be through the nationalization of the industry. Only then would the factories and workplaces be ran with public and not private priorities.
In my essay, Nationalization in Puerto Rico, I lay out a seven-point nationalization plan for various Puerto Rican industries and properties. One question that might arise from the reader would be what to do with the returns generated from these government businesses? While some public corporations could run model one (which would create worker cooperatives), others run model two, and some mix both models, others could result to another system which is not linked to either: social programs. The workers of one industry could be paid a set wage and their products be sold at an above-manufacturing cost, and the profits generated could be invested into the appropriation of other private enterprises or social projects such as infrastructure, health care, or education. For example, the nationalization of Banco Popular would pull in enough to fund 100% of the educational costs for all young adults of ages 18 to 22. The nationalization of the credit card and health insurance industries could the pay college tuition for every Puerto Rican over the age of 18.
The usage of the surplus capital made from a worker’s labor for public projects would still be the exploitation of the worker, but no longer would it be by the capitalist but by society. Another alternative would be to use the profits generated in each workplace to supply the workers of that specific industry with benefits. Even though a worker would only be getting a fraction of his actual work value, the capital made off of him could be turned around and used for the education and health of the worker and his family.
Who would decide which model to utilize (if any)? If the choice was in the worker’s hands, then they would opt for suggestion one (higher wages) but if it was the consumer’s choice, then they would chose suggestion two (cheaper products). In the long run, I feel as if the effects would be quite the same since both suggestions lead to a raise in purchasing power (not to mention most workers are consumers and most consumers are workers). Whether or not consumers would wish to chose more social programs over cheaper products is unsure, for we all know how some people ignore their basic welfare (such as food, health, education) and chose to spend their earnings on unnecessary products.
In conversations on the subject with various students, I have found that many tend to defend the capitalist factory or landowner. “The landowner requires the $95 (in the shoe worker’s case) in order to fund the operations and reinburse himself for his past investments”. This is true, but years after the capitalist’s industry was first initiated when all of the properties and debts are paid off, the shoeworker will still be receiving $5 an hour. Even when profits jump two or three times more than the year before, the worker will still receive the same pay. At one time or another, a worker might receive a raise either through union sturgggles or the good will of the company’s higher powers, but generally the wage gap will still exist.
Others suggest that this excess capital is required to entice development. Even Marx accepted this when he stated, “capitalism’s exploitative lust for more and more surplus value drives it to be more productive and innovative.” This is true, in the sense that “If the workers are paid the “full value” of what they produce, then there will be nothing left over for profit and new investment.” We must remember though, that it is not the company managers and investors who invent the enterprise’s new gadgets and hi-technology toys – that’s for the wage-paid researchers, scientists, and programmers. Aside from innovation, in my eyes the only contribution a entrepreneur can make to the work place is further investment. A few of those who I have conversed with tell me “the people need the jobs – and if it wasn’t for the investor there would be no factory in the first place.”
This is one of the reasons that I have stressed government expropriation and nationalization in this essay. If private investment is replaced with public investment, the means for business expansion and investment are still available, but without the exploitation of the workers. I do not see how a business could continue to run as efficiently before if just the investor was replaced. It is [usually] not the investor who divides the wages among workers, who chooses what to buy with his investments, and who actually does the production – those are tasks carried out by wage-paid accountants, hired economists, and assembly line workers.
by Luis Orlando Gallardo Rivera
www.reddemcee.com
(I didn’t write this article, it’s an online buddies.’)
In The Twilight of Capitalism, Michael Harrington states that “money is not, in and of itself, capital.” “Something”, he continued, “must happen before it is transformed from a medium of exchange into a power that yields a profit.” Stressing their relationship, he attempts to explain how money becomes capital. Harrington states that
If equals were exchanging the products of their labor – if, say, two independent farmers were dealing with each other – then money would function as a means of payment. But it is only when there is an exchange between historically specific kinds of unequals, between capitalists and workers, that the possession of money allows the former to “make” more money form the labor of the later. So a social class relationship, itself the product of a long history, is the precondition for turning money into capital.
In a later chapter, Harrington notes how the worker “often thinks that he is paid sixty minutes of every hour and is unaware that he is contributing unpaid labor to his employer part of the time.” It is easy to think of an under-paid Third World worker or a slave to be “exploited”, but it wasn’t until I reviewed these lines that it struck me that nearly all of us are exploited. We will work for a set wage while the fruits of our toil will be worth much more. For example, a shoe worker might get paid $5 an hour but will hourly produce $100 worth of shoes. The rest of the $95, after paying for expenses, will end up in the pocket of the owner of the shoe factory, as we all pretty much know. But if you take the time to think about it, the worker’s labor is not worth $5, but $100. If the result of the labor equals more than what the worker is putting into it, then you have exploitation. He’s literally being jipped for $95 and much like with David Ricardo’s labor theory, the capitalist takes the same position as the “parasitic landlords who [do] nothing but collect rent.”
“Can one imagine an American or Soviet official economist announcing that the growth in G.N.P. has been higher than usual because we were successful in extracting more unpaid time from the people?” This is exactly what’s happening. Bob Brown mentions in his article Greed is Good: Phasing in Phasing out how “instead of lowering the prices on DVD’s as manufacturing costs reduce along with increased sales, they [DVD marketers] intend to jack the prices up as far as they possibly can.” In the private market, money cannot be made without someone being literally screwed over. Whether it be the country that is not getting paid for their natural reserves of fossil fuels and resources, the worker who’s wages are less than the value of the labor, or the consumer who purchases products for 1,000s of times more than what it costs to manufacture them, we all tend to be taken advantage of. The purpose of this essay is to suggest some random ideas and theories on how the work place can be reformed to minimize this problem (and specifically that of unpaid labor time.)
So how do we cure this unpaid labor time? Well, there are two ways to run a relationship between the wages, labor, workers, and their products without the exploitation:
(1) Pay a worker the value of his labor. If a worker’s labor produces about $500-worth of products an hour, then he deserves his $500 an-hour wage (minus costs for the maintenance and purchase of tools and machinery). This alternative labor ethnic is generally in favor of the worker. A negative side effect includes the following; if one worker manufactures ten products, each with a price tag of one dollar, and only nine sell, than the value of his hourly labor is not $100 but $90. In this case, the wages of the worker are directly dictated by the demand and sales of the products that he produces. As the demand rises or lowers, the worker’s wage follows the same pattern. Two workers who do the exact job at two different factories could possibly receive two different wages depending on how well their company sells the products.
(2) Charge the consumer according to the wage of the worker. Say one worker is being paid $5 an hour and produces one item worth about $20. The cost of the consumer item could be dropped to $5 (not including the costs for shipping, packaging, etc.). This alternative labor ethnic is generally in favor of the consumer. Much like in the previous suggestion, there is also a negative side effect: the wages of this type of worker are not moderated by market prices (in fact, the opposite is true) so a drop in product sales will result in debt for the factory.
Either of these, or a mixture of the two, could be implemented to decrease and eliminate the exploitation of a worker or producer. A mixture of a combination of the two and layoffs could counter each of their negative side effects. One must note that it is not always as simple to calculate the true labor value with production and industrial workers as it is with employees in fields such as retail, maintenance, and other non-producing industries. A plumber cannot be paid according to the total value of all products that he has fixed (why hire a plumber when new pipes and sinks could be bought?) and a retailer cannot be paid the value of the items that he sold (otherwise the store would have to artificially increase the item’s price by 100% to pay for wages). Of corse there are countless other matters to take into account – deducting wages from workers to pay for manufacturing costs and raw materials – but in this essay I attempt to sum up the problem and possible alleviations in their simplist form. These issues will be tackled in later writings.
Running a business using either of the two proposals is the only way to run a work place without exploiting the workers. It is highly doubtful that private enterprises would carry on such policies, for managers, company executives, and CEOs would no longer be receiving their hefty paychecks. The only way either of these suggestions could be carried out would be through the nationalization of the industry. Only then would the factories and workplaces be ran with public and not private priorities.
In my essay, Nationalization in Puerto Rico, I lay out a seven-point nationalization plan for various Puerto Rican industries and properties. One question that might arise from the reader would be what to do with the returns generated from these government businesses? While some public corporations could run model one (which would create worker cooperatives), others run model two, and some mix both models, others could result to another system which is not linked to either: social programs. The workers of one industry could be paid a set wage and their products be sold at an above-manufacturing cost, and the profits generated could be invested into the appropriation of other private enterprises or social projects such as infrastructure, health care, or education. For example, the nationalization of Banco Popular would pull in enough to fund 100% of the educational costs for all young adults of ages 18 to 22. The nationalization of the credit card and health insurance industries could the pay college tuition for every Puerto Rican over the age of 18.
The usage of the surplus capital made from a worker’s labor for public projects would still be the exploitation of the worker, but no longer would it be by the capitalist but by society. Another alternative would be to use the profits generated in each workplace to supply the workers of that specific industry with benefits. Even though a worker would only be getting a fraction of his actual work value, the capital made off of him could be turned around and used for the education and health of the worker and his family.
Who would decide which model to utilize (if any)? If the choice was in the worker’s hands, then they would opt for suggestion one (higher wages) but if it was the consumer’s choice, then they would chose suggestion two (cheaper products). In the long run, I feel as if the effects would be quite the same since both suggestions lead to a raise in purchasing power (not to mention most workers are consumers and most consumers are workers). Whether or not consumers would wish to chose more social programs over cheaper products is unsure, for we all know how some people ignore their basic welfare (such as food, health, education) and chose to spend their earnings on unnecessary products.
In conversations on the subject with various students, I have found that many tend to defend the capitalist factory or landowner. “The landowner requires the $95 (in the shoe worker’s case) in order to fund the operations and reinburse himself for his past investments”. This is true, but years after the capitalist’s industry was first initiated when all of the properties and debts are paid off, the shoeworker will still be receiving $5 an hour. Even when profits jump two or three times more than the year before, the worker will still receive the same pay. At one time or another, a worker might receive a raise either through union sturgggles or the good will of the company’s higher powers, but generally the wage gap will still exist.
Others suggest that this excess capital is required to entice development. Even Marx accepted this when he stated, “capitalism’s exploitative lust for more and more surplus value drives it to be more productive and innovative.” This is true, in the sense that “If the workers are paid the “full value” of what they produce, then there will be nothing left over for profit and new investment.” We must remember though, that it is not the company managers and investors who invent the enterprise’s new gadgets and hi-technology toys – that’s for the wage-paid researchers, scientists, and programmers. Aside from innovation, in my eyes the only contribution a entrepreneur can make to the work place is further investment. A few of those who I have conversed with tell me “the people need the jobs – and if it wasn’t for the investor there would be no factory in the first place.”
This is one of the reasons that I have stressed government expropriation and nationalization in this essay. If private investment is replaced with public investment, the means for business expansion and investment are still available, but without the exploitation of the workers. I do not see how a business could continue to run as efficiently before if just the investor was replaced. It is [usually] not the investor who divides the wages among workers, who chooses what to buy with his investments, and who actually does the production – those are tasks carried out by wage-paid accountants, hired economists, and assembly line workers.