Re: RAISE THE MINIMUM WAGE TO $120 AN HOUR!!

From: BlackWater (bw_at_barrk.net)
Date: 06/18/04 

Date: Fri, 18 Jun 2004 18:08:21 GMT

On Fri, 18 Jun 2004 02:50:52 -0400, Robert Vienneau
<rvien@see.sig.com> wrote:

>
>Here's a simple parable. Consider an island with a particularly simple
>society with two people, Robinson and Friday. Robinson and Friday live
>on one good, call it corn. At the start of our story, Robinson and Friday
>have just finished a feast. Both Robinson and Friday have each eaten
>food baked out of corn. Also, Robinson has 50 bushels corn remaining.
>Friday, perhaps because he's newly arrived with just his contribution to
>the meal, has none.
>
>2.0 THE INITIAL DEAL
>
>Both Robinson and Friday can see that they must continue to eat in the
>future. They understand that their continual survival could be achieved
>by planting the remaining corn, saving 50 bushels corn in next year's
>harvest, and living off of the remainder. (In this story, Robinson and
>Friday are each able to go a year between meals.)
>
>So Friday says to Robinson, "Why don't you share your seed corn with me.
>We'll each plant 25 bushels, and tend it half our time throughout the
>year. If your island is like my tribe's, that will allow us to harvest
>three bushels of corn for every bushel we plant. So at the end of the
>year, each of us will have 75 bushels. We can each eat 50 bushels and use
>the remaining 25 bushels for seed in the next year."
>
>Robinson says, "Why should I give you anything? I happen to believe in
>property rights."
>
>Friday says, "You don't want to see me starve, do you? What do you
>propose I do?"
>
>Robinson says, "I'll tell you what. Why don't we come to the following
>voluntary agreement. You take the 50 bushels of corn, plant it, and tend
>it throughout the year. After harvesting, I'll take the 150 bushels we'll
>get and pay you 50 bushels for your helpful work."
>
>Friday says, "Why should I agree to that? I do all the work, and you
>loaf around all year in a tropical paradise."
>
>Robinson says, "Well, it's my seed corn."
>
>Friday says, "Oh, all right. It's a deal."
>
>2.0 THE STORY CONTINUES
>
>At the end of the year, Friday consumes his wages of 50 bushels. Robinson
>consumes his profits of 50 bushels. They are in the same situation as
>they were originally. They strike the same deal again and continue year
>after year.
>
>3.0 FRIDAY READS A BOOK
>
>It seems Robinson has brought the captain's library off the shipwreck
>with him. One day Friday happens to notice this library. He says to
>Robinson, "What are all these books?"
>
>Robinson says, "I don't know. Being a practical person of the middle
>order of society, I never bothered to read them."
>
>Friday says, "Well, can I have that big tome by that fellow Marx."
>
>Robinson says, "Unlike the corn, it's of no use to me. You can have it."
>
>Friday takes away the book and tries to read Marx. He finds it quite
>head-scratching in places, particularly the Hegel. That part seems so
>deep as to be incomprehensible. But he does get some glimmers from it.
>
>4.0 A DEBATE
>
>One day at the end of three years of work, Friday confronts Robinson
>and tells him, "You're exploiting me. I only get a third of the
>produce. This year I should get 26/27th of it. And if we continue on in
>this way, I should get all of it eventually"
>
>Robinson can't make anything out of this. He says, "But I provide the
>seed corn. Labor and seed corn are measured in different units. How
>can you make a fair claim on any portion of the output but what we
>have agreed to?"
>
>Friday says, "It will take me a little while to explain." Robinson
>says, "Unless some pirates show up, we have time. Go on."
>
>Friday says, "Each year we harvest 150 bushels corn using 1 year of
>labor and 50 bushels seed. We can see that any proportion of the
>harvest was due to the corresponding proportions of the labor and the
>seed corn. Here's some examples." And Friday draws the following
>table in the sand:
>
>
> FRIDAY'S TOTAL
> PROPORTION SEED CORN LABOR HARVEST
>
> 1 50 Bushels 1 Year 150 Bushels
> 2/3 33 1/3 Bushels 2/3 Years 100 Bushels
> 1/3 16 2/3 Bushels 1/3 Years 50 Bushels
> 2/9 11 1/9 Bushels 2/9 Years 33 1/3 Bushels
> 1/9 5 5/9 Bushels 1/9 Years 16 2/3 Bushels
>
>
>Robinson says, "That seems fairly obvious. I don't see where you are
>going with this." Friday says, "We can use these numbers to break down
>my work in each year to produce the output in the following years:"
>
>
> WORK TOWARDS WORK TOWARDS WORK TOWARDS
> YEAR YEAR 3 HARVEST YEAR 2 HARVEST YEAR 1 HARVEST
>
> 1 5 5/9 Bushels seed 11 1/9 Bushels seed 33 1/3 Bushels seed
> & 1/9 year's labor & 2/9 year's labor & 2/3 year's labor
> produce produce produce
> 16 2/3 Bushels 33 1/3 Bushels 100 Bushels eaten
>
> 2 16 2/3 Bushels seed 33 1/3 Bushels seed
> & 1/3 year's labor & 2/3 year's labor
> produce produce
> 50 Bushels 100 Bushels eaten
>
> 3 50 Bushels seed
> & 1 year's labor
> produce
> 150 Bushels
>
>
>Robinson says, "I guess that's fairly clever. If I add horizontally,
>I see that you have allocated each year's seed, labor, and output to
>your columns. That's good. But if I add the first column vertically,
>all I see is that our 150 bushels corn is the result of 1 4/9 year's
>of your work and 5 5/9 bushels of my initial seed corn. What's your
>point?"
>
>Friday says, "Wasn't that seed corn the result of your work before
>I showed up?"
>
>Robinson says, "Well, yes. I worked hard for it."
>
>Friday says, "That may be. But can't we say that the 150 bushels we
>have now embodies the sum of 1 + 1/3 + 1/9 + 1/27 + ... year's
>labor? And therefore that, the total labor embodied in this third
>year's harvest is 3/2 year's of effort?"
>
>"I don't know."
>
>"It's just arithmetic. My contribution to this year's harvest, as
>you saw, is 1 4/9 years of work. The 5 5/9 bushels you originally
>contributed represents the remaining 1/18 years needed to produce
>the harvest. Since [ 1 4/9 ]/[ 1/18 ] is 26, I should get 26 bushels
>for every one of yours in the harvest."
>
>Robinson says, "Um..."
>
>"In other words, I, Friday, should get 26/27ths of this year's produce
> as I said originally."
>
>"Furthermore," Friday continues, "as long as we continue to follow
>your deal, your fair share should become smaller and smaller. In the
>limit, all of the annual harvest has been produced by me alone if you
>don't help out at all."
>
>Robinson says, "Aren't you denying my capital is productive?"
>
>Friday says, "We certainly need the seed corn. But how is your
>ownership of it productive?"
>
>"Sure it is. You need me to make the decisions what to do with it."
>
>"Maybe so. My labor's the horse, and your capital is the lash."
>
>This comment seems subversive to Robinson, and he gets angry. "Look,
>your argument only works because of the simplicity of our island.
>Excess profits and losses indicate where investment can be
>directed most advantageously."
>
>Friday says, "You are only arguing that the rate of profit be
>calculated, not that profits be paid out. That indicator is
>only one among several. We could have any of many different
>incentive schemes."
>
>5.0 THE UPSHOT
>
>Frustrated, Robinson says, "A deal's a deal. Whatever comes out of
>our market transactions, that's what's fair. I refuse to do
>arithmetic, so I can continue to talk nonsense."
>
>This blockheadedness on Robinson's part so angers Friday that he
>stages a revolution and kills Robinson. The island lives on in
>communism from that day forward.
>
>6.0 SOME NOTES
>
>This story is un-Marxist. According to Marx, capitalism did not
>arise through people rationally constructing capitalist institutions,
>property rights, markets, etc. Nor will it fall by convincing
>people of its unjustness by rational argument. There needs to
>be a materialist element in an account of beliefs and a deeper
>sociological analysis for the story to be Marxist. My story is much
>too idealist for Marx. Also, my story does not contain money, and
>money is central to Marx's account of value.
>
>The story can be made more realistic. We can add many workers and
>capitalists, and assume perfect competition. We can also assume
>continuously differentiable production functions. For example,
>this parable is consistent with the Cobb-Douglas production
>function:
>
> Q( L, X ) = 3 * 50^( 1/3 ) * L^( 1/3 ) * X^(2/3)
>
>where Q is the corn harvested at the end of the year, L is the
>number of person-years of labor during the year, and X is the
>bushels of seed corn. Whatever wage comes out of the market will
>be equal to the value of the marginal product of labor. These
>assumptions and this equality of the wage and the value of the
>marginal product of labor are compatible with some such calculations
>as in the story. Unless the workers eventually get the entire product,
>they are exploited, as above.
>
>It's also not clear in my story whether Friday's understanding
>advances beyond some of Marx's predecessors:
>
> "From the very nature of labour and exchange, strict justice
> requires that all exchangers should be not only *mutually*, but
> that they should be *equally* benefited. Men have only two things
> which they can exchange with each other, namely, labour, and the
> produce of labour...If a just system of exchanges were acted upon,
> the value of all articles would be determined by the *entire cost
> of production; and equal values should always exchange for equal
> values*. If, for instance, it takes a hatter one day to make a hat,
> and a shoemaker the same time to make a pair of shoes - supposing
> the material used by each to be of the same value - and they
> exchange these articles with each other, they are not only mutually
> but equally benefited: the advantage derived by either party
> cannot be a disadvantage to the other, as each has given the same
> amount of labour, and the materials made use of by each were of
> equal value. But if the hatter should obtain *two* pair of shoes
> for *one* hat - time and value of material being as before - the
> exchange would clearly be an unjust one. The hatter would defraud
> the shoemaker of one day's labour; and were the former to act thus
> in all his exchanges, he would receive, for the labour of *half a
> year*, the product of some other person's *whole year*...We have
> heretofore acted upon no other than this most unjust system of
> exchanges - the *workmen* have *given* the capitalist the labour
> of a whole year, in exchange for the value of only half a year -
> and from this, and not from the assumed inequality of bodily and
> mental powers in individuals, has arisen the inequality of wealth
> and power...It is an inevitable condition of inequality of
> exchanges - of buying at one price and selling at another - that
> capitalists shall continue to be capitalists, and working men to
> be working men - the one a class of tyrants and the other a class
> of slaves - to eternity...The whole transaction, therefore, plainly
> shews that the capitalists and proprietors do no more than give the
> working man, for his labour of one week, a part of the wealth which
> they obtained from him the week before! - which just amounts to
> giving him *nothing* for *something*...The whole transaction between
> the producer and the capitalist is...a mere farce: it is, in fact,
> in thousands of instances no other than a bareface though *legalised
> robbery*...
>
> ...Where equal exchanges are maintained, the gain of one man
> cannot be the loss of another; for every exchange is then simply
> a *transfer*, and not a sacrifice, of labour and wealth. Thus,
> although under a social system based on equal exchanges, a
> parsimonious man may become rich, his wealth will be no more
> than the accumulated produce of his own labour. He may exchange
> his wealth, or he may give it to others...but a rich man cannot
> continue wealthy for any length of time after he has ceased to
> labour. Under equality of exchanges, wealth cannot have, as it
> now has, a procreative and apparently self-generating power, such
> as replenishes all waste from consumption; for unless it be renewed
> by labour, wealth, when once consumed, is given up for ever. That
> which is now called *profit* and *interest* cannot exist as such
> in connection with equality of exchanges; for producer and
> distributor would be alike renumerated, and the sum total of
> their labour would determine the value of the article created and
> brought to the hands of the consumer."
> -- John Bray (quoted by Marx in _The Poverty of Philosophy_)
>
>While my parable is non-Marxist, the arithmetic of exploitation used
>in it is based on my understanding of some aspects of Marx's theory. It
>particular, it is not clear to me that "fairness" has anything to
>do with Marxist exploitation:
>
> "...we must understand the importance which Marx attached to his
> distinction between 'labour' and 'labour-power': an importance
> essential for the context of exploitation as a key to understanding
> the bourgeois (or capitalist) mode of production. The role of the
> labour theory of value in relation to the theory of surplus value
> is frequently misunderstood. Often this is interpreted as embodying
> a Lockean 'natural right' principle, to the effect that the product
> of a man's labour belongs 'of right' to the labourer; whence it is
> held that the appropriation of part of this product by the capitalist
> is 'unnatural' and unethical. Hence exploitation is interpreted as a
> quasi-legal or ethical concept rather than a realistic economic
> description. If what we have said about labour and the labour process
> has been appreciated, it should be clear that this is an incorrect
> interpretation. What could be said, of course, is that the notion of
> labour as productive *activity* implicitly afforded the definition
> of exploitation as an appropriation of the fruits of activity by
> *others* - appropriation of those fruits by those who provided no
> productive activity of their own. But far from being an arbitrary
> or unusual definition of 'productive' and 'unproductive', this would
> surely meet with general aggreement as normal usage of these words.
> The problem for Marx was not to prove the existence of surplus value
> and exploitation by *means* of a theory of value: it was, indeed, to
> *reconcile* the existence of surplus value with the reign of market
> competition and of exchange of value equivalents. As he himself
> expressed it: 'To explain the *general nature of profits*, you must
> start from the theorem that, on an average, commodities are *sold at
> their real values*, and that *profits are derived from selling them at
> their values*...If you cannot explain profit upon this supposition,
> you cannot explain it at all.'
>
> The point of this can the better be appreciated if it is remembered
> that the school of writers to whom the name of the Ricardian
> Socialists has been given (such as Thomas Hodgskin, William Thompson
> and John Bray), who can be said to have held a 'primitive' theory of
> exploitation, explained profit on capital as the product of the
> superior bargaining power, lack of competition and 'unequal exchanges
> between Capital and Labour' (this bearing analogy with Duhring's
> 'force theory' which was castigated by Engels). This was the kind of
> explanation that Marx was avoiding rather than seeking. It did *not*
> make exploitation *consistent* with the law of value and with market
> competition, but explained it by departures from, or imperfections in,
> the latter. To it there was an easy answer from the liberal economists
> and free traders: namely, 'join with us in demanding *really* free
> trade and then there can be no "unequal exchanges" and exploitation.'"
> -- Maurice Dobb, "Introduction" in K. Marx, _A Contibution to the
> Critique of Political Economy_, Progress Publishers, 1970, pp.
> 12-13.
>
>Interestingly enough, the great Austrian economist Eugen Bohm-Bawerk's
>account of capitalism arguably does not challenge Marx's claim that
>the workers are exploited:
>
> "Whoever is the owner of a capital sum is ordinarily able to derive
> from it a permanent net income which goes under the scientific name of
> interest in the broad sense of the term.
>
> This income is distinguished by certain notable characteristics.
>
> It arises independently of any personal act of the capitalist. It
> accrues to him even though he has not moved a finger in creating it,
> and therefore seems in a peculiar sense to arise from capital, or,
> to use a very old metaphor, to be begotten by it...And, finally, it
> flows without ever exhausting the capital from which it arises, and
> therefore without any necessary limit to its continuance. It is, if
> one may use such an expression in mundane matters, capable of
> everlasting life.
>
> And so the phenomenon of interest presents, on the whole, the
> remarkable picture of a lifeless thing, capital, producing an
> everlasting and inexhaustible supply of goods. And this remarkable
> phenomenon appears in economic life with such perfect regularity that
> the very concept of capital has often been founded on it. Thus
> Hermann, in his _Staatswirtschaftiche Untersuchungen_ defines capital
> as 'wealth which produces a constant flow of income without suffering
> any diminution in exchange value.'
>
> *Whence and why does the capitalist receive this endless and
> effortless flow of wealth?*"
> -- Eugen von Bohm Bawerk, _Capital and Interest_, "Volume 1:
> History and Critique of Interest Theories", p. 1.
>
>Notice that attempts to change the conditions don't attack the logic
>of the above story. I don't see how the ability for some workers to
>save to become capitalists or attempts to justify some highly
>paid personnel as being paid for the labor of supervision threatens
>the logic of the story. If you want to criticize the logic, show
>that it's not reasonable within its own assumptions. But this cannot
>be done. On the other hand, those that understand, say, the John von
>Neumann model of growth know how to generalize the story to make it
>much more realistic.
>
>I've probably already exhausted the reader's patience with
>these comments. Let me conclude with a long Marx quote about the
>bad faith of many fundamentalist defenders of capitalism:
>
> "Once we assume this production is founded on capital, the condition
> that the capitalist must introduce into circulation values that he
> has created - whether through his own labour or otherwise, since he
> does not yet have available wage-labour, either present or past -
> in order to set himself up as a capitalist, now belongs to the
> antediluvian conditions of capital; it belongs to the historical
> prerequisites, which already as such are past, and thus belong to
> the history of its development and not in any way to its
> contemporary history, i.e. not to the real system of the mode of
> production that it controls... In the original transition from
> money, or value existing in its own right, to capital, there is
> presupposed an accumulation by the capitalist (achieved, perhaps,
> by saving the products or values created by his own labour),
> which he accomplishes before he was a capitalist. Thus although
> money becomes capital as a result of prerequisites which are
> determined and external to capital, as soon as capital as such
> has come into existence, it creates its own prerequisites,
> namely the possession of real conditions for the creation of
> new values without exchange - through its own process of
> production. These prerequisites, which were originally conditions
> of its formation - and thus could not yet arise from its action
> as capital - now appear as the results of its own realisation,
> its own reality, as established by it - not as the condition of
> its coming into being, but as the results of its existence.
> Capital no longer precedes from its prerequisites in order to
> develop; it is its own prerequisite, and proceeds from itself,
> creating the presuppositions of its maintenance and growth...
> This means that individual capital can still be formed, for
> example by hoarding. The hoard is, however, only changed into
> capital by exploitation of labour. Bourgeois economists, who
> consider capital to be an eternal, natural (and not historical)
> form of production, are always seeking to justify it, in that
> they portray the conditions of its formation as the conditions
> of its present realisation. They present the conditions in which
> the capitalist (because he is still developing into a capitalist)
> still has a non-capitalist mode of appropriation as the very
> conditions of capitalist appropriation. These attempts at
> apology indicate a bad conscience, and an inability to harmonise
> the means of appropriation of capital, as capital, with the
> general laws of property proclaimed by capitalist society itself."
> -- Karl Marx, _The Grundrisse_
>
>--
>Try http://csf.colorado.edu/pkt/pktauthors/Vienneau.Robert/Bukharin.html

   Let me paraphrase Churchill ...

   "Capitalism is the worst economic system ever invented - except
   for all the others."

   You can't please all of the people all of the time. No matter how
   you divide-up the labor and its rewards you will find plenty of
   people who are convinced they are being unfairly used, denied,
   and exploited. Capitalism IS 'imperfect' - even 'unfair' at times -
   but it still offers the most OPPORTUNITY, and opportunities for
   opportunity, of any economic system to date. The 'flaws' in
   capitalism are thus mostly cosmetic - the pillar remains strong,
   the paradigm serves.

   Even the kommies have figured it out.

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