Remember Our Forefathers

Capitalism and Wages

In the previous introduction, I asked the reader to consider five logical conclusions which, when fully understood, completely derail the very foundation for a person’s collectivist sympathies. In this edition, I’d like to elucidate the first two proposals:

and,

But before I go further into that quest, I’d like to touch upon a gross misunderstanding which quite possibly could be considered the foundation for the anticapitalist sentiment that fuels the collectivist fire: the confusion of capitalism with government. Capitalism, properly defined, is an economic system in which the investment in and ownership of the means of production, distribution, and exchange of wealth is made and maintained by private individuals. Capitalism is not a form of government, and hence has no coercive power over the mass of people. Absent state intervention, individual capitalists nor combinations of individuals into corporations can no more procure complete control over the means of production or property than can unions of individuals exercise strangleholds over the owners of those means and property. Monopolies are solely the demon offspring of state regulation and privilege, and without that privilege would not stand a chance in the face of free competition. Resources, although scarce, are most certainly in existence. So, if Company A exclusively produces a good for consumption which becomes a popular item, and then the Company’s behavior becomes antagonistic to the sensibilities of the consumers whether by higher than accepted prices or withholding goods from the market, options arise for the mass of people to express their displeasure; 1. the mass of people can withhold their consumption of the product thereby forcing the Company to lower prices, or 2. another individual or corporation can create the same or similar product and capitalize on the market.

Capitalism cannot mix with government, for it is at that point where the designs of the market cease to meet the very definition of capitalism. Government is defined as the political direction and control exercised over the actions of the members, citizens, or inhabitants of communities, societies, and states. That control, whether exercised by an individual or group of individuals, is obviously in stark opposition to capitalism. Furthermore, a mixed economy, one where state intervention and regulation pervades the market place, is the first step toward totalitarian control over the economy. If capitalism is a system of free individual ownership of the means of production and property, once the state so much as seizes a minute fraction of enterprise, the system no longer is capitalist and teeters on the brink of utter tyranny and despotism. So let us stop with the disparaging of a system which not one of us has been alive to fully take part in.

Now that we have gotten through the most pressing concern, let us turn to the idea of a person being a slave to a wage.

My original assertion was that it is impossible to be a slave to a wage if employment is a voluntary contract. My detractors will counter by stating that the term means that a person is a slave to earn the wage that will maintain a standard of living that is arbitrarily set as acceptable . To that I will say, absent government, no such slavery exists. We will touch upon the details of that frivolous argument in greater depth when we get to my third proposal, but that complete deconstruction of the ‘wage slave’ idea will come later. For now, let us deconstruct the term wage slave.

A slave is a being who is forced into labor without his/her consent and without compensation. Right there, the term is obviously utter fallacy. Hyperbole should be reserved for story tellers, not economists and sociologists. People work for wages because those wages serve as a medium for the procurement of their livelihood. It is silly to think that one person can supply himself with all the basic necessities of life without so much as even a barter economy, and hence we have the division of labor. If we can accept that as being the case, and understand that a wage, as a medium for trade, does not necessarily have to be a form of coin or paper bill, then it becomes obvious that people have been working for ‘wages’ since the beginning of organized society.

The determining factor then which declares someone a slave to a wage must be the amount of the wage, not the mere act of labor. The problem with that is, employment is a completely voluntary action. Slavery is no longer an acceptable practice, and therefore the acceptance of the wage is a voluntary move. This brings us to the second proposal, that the accepted wage sets the market for the labor, not vice versa.

This proposal begins to pave the way for the third proposal, which as I said above, completely demolishes the ‘wage slave’ idea. Labor, like all other scarce resources, is nothing more than a commodity in and of itself. The value of all commodities is set by both what the buyer is willing to pay and what the seller is willing to accept. It cannot be any other way; for if a laborer refuses an employment contract due to its terms, the laborer is absolutely free to do so, and therefore sets the market for his/her labor. A simple analogy would be to the purchase of a television. If a person walks into, say Best Buy, with the intention to leave with television, that person has every opportunity to negotiate the price. If Best Buy accepts a lower price for the television, then that is where the market value is set. So it goes with labor. If the laborer decides that the terms of employment meet the requirements for his/her labor, it is at that point that the market is set.

Next we shall prove how it is not those wages that depress or elevate the standard of living, but all of the regulation which is compelled upon the people by its government.

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