Labor's Price

Column by Jim Davies.

Exclusive to STR

The wage due for a week's worth of unskilled labor today might be $464, and so it was two or three hundred years ago – though then, it was often called a “pound.” Of silver, that is.

Is that to be fixed by law as the permanent value of such labor, or is it to be free to vary subjectively with demand, supply and quality? I hope that all readers will reply “the latter.” Some work better than others, sometimes the employer suffers a weak demand for his products, and sometimes he can barely keep up with that demand. He will want or need to pay less, or more, for labor accordingly. That's rather basic free-market stuff.

But Karl Marx, whom Alex Knight recently described [9] here as the “most evil” person ever to live, said the opposite; he proposed that labor can be valued objectively, that it has a fixed value regardless of market conditions and that such value attaches to the person laboring. On the principle that it's always a good idea to “know one's enemy,” it's worth examining his view.

It does have a certain appeal. “Work is its own reward” is sometimes said, though tendering it at the checkout may not be too effective. But “if it's worth doing, it's worth doing well” is a fine principle, and the simple laborer in a large system such as a factory cannot easily judge the value of his contribution; he puts in a good week's work, and expects pay accordingly. Work, it may very well seem to him, has an inherent value, objectively. He cannot influence market demand for the products he helps make, any more than the weather; so why should such factors affect how much he gets paid?

This is not just something with popular appeal, it does have a superficial appearance of being “fair.” Marx may have embraced it for both reasons. Now follow where it led him.

Even if the idea of a fixed reward for a fixed amount of labor were modified so as to decree higher rates for specialists than laborers (e.g., neurosurgeons might get triple the basic rate), each of them would have to be prepared by experts and imposed by force of law. Deviants and cheats who contrived to pay more (or less) than the prescribed rate would have to be chastised. Marx saw all that, and his manifesto [10] provided for it; the population was even to be “redistributed” so as to make labor resources available where the experts decided it was needed. Ultimately, if labor has a fixed value, its use must be micromanaged by a governing elite; work must be compulsory and it must be performed where directed. It leads us straight in to a Brave New World [11]. And to help reach that utopia of fixed rates, in the meantime earnings were to be taxed “progressively,” meaning that the more you earn, the greater the rate of tax, not just the sum due. Quite deliberately, those paid over the approved sum were to be penalized. The US Congress continues to follow his advice. The President this winter repeatedly said that the rich “can afford a little more,” as if they were not already being selectively punished for succeeding in this country. Marx is alive and well in Washington, D.C.

We can further understand Marx's mainspring by taking this logic a bit further. If labor has an objective value, and if all production comes from labor, it follows that workers (defined in some way) properly own all that they produce; that they are entitled to all its fruits. So if in some factory the profits come to one silver pound per worker per week but each is being paid only 0.8 pounds, somebody is exploiting him! Thus, the factory owners become The Enemy. I hope I've fairly represented the way Marxists think, and if so, I've shown why his Manifesto seems so bloodthirsty – that the progressive income tax was necessary “to crush the middle class under the guise of of a need to finance the government.” Of course; the middle class was parasitic, exploiting workers, living off their labor, The Enemy. So, crush the bourgeoisie! Any excuse will do!

When he was not busy drinking, young Karl had, at the University of Berlin in the late 1830s, studied the philosophy of G.W.F. Hegel - whose contribution to human wisdom was to propose that man is happy only when fully identified with his community; when its aims are his aims, when he applies all his ambitions and energy and skill and life to its well-being. He even called that “freedom”! Hegel (1770-1831) with this state-idolizing philosophy had sprung to prominence under King Frederick William III, who, after his army's humiliating 1806 defeat by Napoleon, ordered that all children be schooled by the state to learn obedience to the state; his "Prussian school" system was what Mann copied and brought to America and is what we live with today. So both that and Marx's communism were triggered by Napoleon's rampage and plunder of Europe, which was occasioned by the spectacular failure to create a viable economy by the revolution in France, which resulted from centuries of domination by the aristocratic governors. The sequence well illustrates how governing (the use or threat of violence to impose rule) triggers new violence, which begets more violence, which . . . .

Hegel's ideal is a transfer of worship from God to the State, and Marx swallowed it whole. As Rothbard rightly perceived, that's a true and passionate religious devotion. The sentiment – the primacy of the state over its subjects – is now found everywhere. In this country, for example, we hear chanted, “I pledge allegiance to the Flag of the United States of America, and to the Republic for which it stands . . . .” though the associated Bellamy salute [12] has been modified to bring the right hand down to cover the heart. I wonder why. Next time you hear the Pledge recited, do remember Hegel. And Marx, Hitler et al.

So when Marx decided labor had a fixed value and thus implied it should be directed, it was a simple step to blend that idea with his religious devotion to the supremacy of the community and conclude that property as well as labor belongs properly only to it, not to the individual; hence his aim to abolish private property and hold everything in common, i.e., “communism.” Murray Rothbard, in Requiem for Marx [13], has an extensive and amusing history of communism from its origins in the 1500s when certain “millennial anabaptists” of central Europe practiced common ownership in their communities for religious reasons (rather like the Pilgrims in their disastrous first year in the Commonwealth of Massachusetts) – and all of them foundered on two problems: (1) how to motivate anyone to perform work, since the products of labor went not to the laborer but to the common store, and (2) how to prevent the governing elite – needed to overcome that problem by directing labor and allocating food – from living a life of unegalitarian luxury. Those were never solved in Münster [14] then, nor later by Marx in theory, nor later yet in Moscow in practice.

It's easy for us to recognize the evil in the Manifesto itself, how it proposed violating the Self Ownership Axiom all over the floor. But once you grant the premise that labor has a fixed, objective value, it makes sense. Market anarchists sometimes express our feelings about the State in fairly lurid terms – because we recognize it as The Enemy; Marx supposed someone else was in that position, and wrote accordingly. “Evil”? Yes, but not beyond understanding, once we see his root error. I really don't think Karl Heinrich got up in the morning, saw himself in the looking glass (he skipped shaving) and asked himself what new evil he could do that day. Like government employees who haven't yet read this [15], hethought he was doing good, striking blows for the downtrodden and exploited of the world like his disciple Karl Radek [16] several decades later. He didn't have horns growing out of his head; he just got his premise wrong.