no third solution

Blogging about liberty, anarchy, economics and politics

Wages, Revenue & Labor

August 10th, 2010

Without ‘owners’ the workers collect revenue from sales. What the workers keep we might consider “wages” in an accounting sense, but strictly speaking, there are no “wages”, there is just “revenue”.

We might suppose that, in addition to probably cutting out the ‘middleman’ (the capitalist-entrepreneur), worker-owners would allocate revenues over their costs of production differently than would the capitalist ‘owners’. For starters we expect that they would either have, or aim to have, vastly different cost structures in the first place. But that’s a digression we need not follow.

So for the moment let’s forget about this and imagine that the workers have just wrested control from the hands of the “capitalists”, and that the cost structures (imperfect as they are) remain at least for the short- and probably for the medium-term.

Aside from beginning to pink-slip all the bureaucrats (how you identify and defenestrate the bureaucrats, I don’t really care) and turning those dividend checks (previously distributed to absentee shareholders) in to coin in the workman’s pockets, what else do they do differently?

The entirety of disagreement between cappies/commies, boils down to what is essentially a difference of opinion with regard to how sales revenues should be allocated.  Is it really that simple?

Maybe, but probably not. Stay tuned.

Proof You Are Being Exploited

July 16th, 2010

Ever wonder why we’re still working 40 hours per week? As if that’s some sort of magic equilibrium between labor/leisure that has just organically emerged over the centuries? It’s insanity, really. And evidence that we aren’t free to choose. I touched on this before, commenting that all of our productivity is wasted:

The average worker is several orders of magnitude more productive than he might’ve been a half-century hence… We’ve got more more people doing more jobs, producing more things and still we’re working 40 or 50 or 60 hours a week.

And this doesn’t strike anybody as being just a little bit insane?

In a free market where you aren’t being exploited there is a continuum, a trade-off between labor and remuneration. Let’s say you figure out some way to do your job in a quantifiably better/faster/more efficient manner. Assume for this thought experiment that you are able to double your productivity.

In a free market there is a real tradeoff between labor, leisure, and pay

What would happen in a free market? You could cut your work-week in half and achieve the same output for which you would expect the same remuneration. You could keep your work-week the same, in which case you would expect greater remuneration (perhaps as much as double your current pay). Or any combination along that continuum which would result in some amount of less work, and some amount of relatively (but often absolutely) greater remuneration.

What happens in practice? If you develop some brand new process which, compared to the old process, requires half as much labor, the odds are practically zero that your employer will offer you to begin working a 20-hour work week for the same rate of pay, despite the fact that by working 20 hours you produce the same quality and quantity of output. And it is equally unlikely that they will double your salary, which would justify a 40-hour week because you now produce twice as much and as good of output as before.

Probably what will happen is that some other sap will get canned. You’ll have to absorb at least part of his workload but you will not absorb any of his salary. The corporation will absorb his salary as profit. If you’re fortunate, you’ll get a small raise or spot bonus.

Generally speaking, for a job well-done, under budget, ahead-of-schedule, and to quality, the only reward is more work. We don’t get to enjoy more leisure if we produce more and better and faster, we just have to work even more. For the most part, productivity is severely penalized.

What is the alternative? I do not believe for a second, that given all of the technological advances in the last 200 years, a majority of people in the developed world would continue to work 40 hours a week, if they had any say in the matter whatsoever.  Imagine a 20-hour work week.  Imagine creativity unleashed. Imagine what would happen to progress and productivity, if only people were actually rewarded for the work that they do.

An Open Letter to “Libertarians” Against Immigration Amnesty

May 6th, 2010

If you are one of these ‘libertarians’, who oppose amnesty for migrant workers, who oppose open borders and freedom of travel, employ and commerce, this letter is addressed to you.

Dear “Libertarians”,

I notice a lot of you like to say that brown people in third world countries accept low-wage, hard-labor jobs because that’s better than the alternative (namely: subsistence farming). You argue that this is how the invisible hand of the “free market” works.

No, it’s fucking not.

The only reason they are condemned to these choices is because they had the misfortune of being born in some banana republic, some petty dictatorship, or some ass-backward third-world country. Viz., some place you ‘libertarians’ would never — ever — want to find yourselves; you would kick, punch, claw, gouge and shoot your way out. You would climb mountains, cross deserts, or navigate shark-infested oceans in order to find something better.

But when I bring up immigration, I’m not talking about you. I’m talking about them. You’re worried that if people emigrate, you might not pull down $18/hour plus benefits to be a high school custodian — as if being compelled by the forces of supply and demand to accept a $13/hour gig instead is a degradation even remotely similar to being locked in some craphole third-world country making $100 shoes for 8 cents a day.

You’re saying, “I’m all for the free market as long as I get to play by a different set of rules [than immigrants and residents of LDCs]”. But that’s not how a “free market” works.

You do not get to exempt yourself from the workings of the free market and still call it a “free market”. The same forces which might compel a migrant worker to pick cherries in Traverse City, or to work ‘illegally’ doing midnight shifts at the gas station, may also compel you to sacrifice that vacation home, or the third flat-screen TV, or the brand-new car for your daughter’s sweet sixteen, or your microbrews, or your Marlboros or your expensive tennis shoes and video games — so that those oppressed and disenfrachised can feed their fucking families.

Take a good, long, hard look in the mirror. You are not an advocate of the ‘invisible hand’.
You are an apologist for the ‘invisible fist’, punching all of humanity in the throat, forever.

Sincerely,

David Zemens

no third solution

Blogging about liberty, anarchy, economics and politics