Explaining Exploitation
Here is my way of understanding capitalist exploitation.
Capitalists charge firms a toll for using the means of production. It generally takes the form of either interest or dividends and reduces what firms are able to bid for labor power.
Of course some will argue that this toll is justified. A reward for foregoing consumption is my favorite. Instead of devoting all their income to consumption they devote some to the production of means of production. Apparently this foregoing of consumption cannot be taken on by society as a whole. It has to be contracted out, so to speak.
I might add that taxing the means of production through a toll is not just a distributional problem, it is also a very inefficient thing to do because it leads to the adoption of excessively labor intensive methods of production.
November 24, 2008 at 8:41 am |
To produce something you need multiple inputs. If somebody else has those inputs then you need to convince them to let you use them. There are three ways for humans to interact, through (1) love, (2) trade, or (3) force.
So you could ask them nicely to use their product (love).
Or you could offer them something in exchange for their product (trade).
Or you could use force/coercion to acquire their product (force).
I think love is the best way to coordinate society. But sometimes love is not enough. The person who mines the lead in Uruguay does not love the person who needs a pencil in Singapore enough to just send it over. There are many other examples of where love is not sufficient.
Now you have a decision to make — which alternative mechanism do we use to coordinate human behaviour? Trade or force? I prefer trade.
Voluntary trading for capital does not “exploit” anybody in any meaningful sense of the word. A firm may need capital and labour. If the capital owner and labour owner don’t love the firm, then the firm will need to engage in trade with both capital-owner and labour-owner. Markets will tend to a position where the firm has an incentive to pay the resource owners roughly the marginal productivity of their input. Nothing wrong with that.
March 29, 2009 at 11:12 pm |
I cannot believe an American could think in this way. I started out poor with nothing and with hard work and not government handouts I made a good life. Some of my friends didn’t but they wanted to take the easy way. So they don’t have as much as me. Now with your system they would have the same as me and you say that is fair. Not so. We (this country) fought two wars and a cold war against this sort of government. I will fight it with the very last breath in my body I had rather be dead than live in your vision of the world look at North Korea to see what you are calling for. I think not.
Ken