Thursday, February 13, 2014

Fuller Wages, II: Contrary to Nature

In yesterday’s posting we noted that, in addition to the fact that paying people on the basis of need keeps them in a condition of dependency, that is, having the status of children or slaves, there is another, really big problem involved.  We have to face up to the fact that paying people more (or less) than they are worth is contrary to principles of justice, that is, to nature.

Judgment Day: Weighing a heart against the feather of righteousness
We know that paying people less than the market wage rate is unjust.  That’s obvious.  It’s practically the definition of injustice, to pay people less than the market rate, or to withhold pay.  Even the Egyptian Book of the Dead has something in it about a righteous soul not cheating workers by paying them too little, or withholding what they have earned.  But how is paying people more than the market wage rate unjust?

Out of Balance
Stop and think about it.  An employer is buying someone’s labor.  If labor is worth X per day, but an employer is forced to pay 2X per day, isn’t the employer being cheated?  And isn’t cheating a form of injustice?  Justice, after all, is a two-way street — or a double-edged sword, if it comes to that.

Injustice is contrary to nature, that is, it is not natural.  Since justice means rendering to each what each is due, rendering more or less than what is due is, by definition, unjust to at least one of the parties in a transaction.

That’s obvious.  What might not be quite so obvious is the fact that doing more with less is also natural.  People tend to want to do things in the most efficient way possible, and get as much as possible for the least amount of effort or cost.  R. Buckminster Fuller called this “ephemeralization,” but the fact preceded the term by as long as the human race has been around.

Capital Owners at Work
Doing more with less comes naturally if you work for yourself, or you own whatever is doing the work, e.g., capital.  You want as much as you can get for as little cost or effort as possible.  No one is harmed, because you bear the cost, whether high or low.  You benefit, because you pay.

The wage system distorts this natural tendency, a virtue, into something vicious, that is, a vice.  A worker who has only his labor to sell is going to want as much as he possibly can get for it.  Naturally, he is also going to want to give as little as he can get away with.

If he was the only one involved, there would be no problem.  Unfortunately, there is the person who is buying the labor, and the people who are buying the good or service that the labor, in part, is being used to produce.  If the worker has power, the employer pays more.  If the worker does not have power, the employer will pay less.  Wages will be just only in the rare instance in which the propertied employer and propertyless worker have equal power.

Much better than the U.S. Fuller stamp
Thus, where Fuller’s ephemeralization means doing more with less, the wage system twists that into getting more for less.  Employers and consumers get cheated, demand falls, and workers lose their jobs.

The only way out is to give workers a stake in keeping costs low so that the natural tendency to “ephemeralize” (if Fuller can make up words, so can we) works in favor of everybody, not against them.  An aggressive program of expanded capital ownership, such as Capital Homesteading, is therefore not only consistent with nature, it is in everybody’s best interest, morally and economically.



Baseball Billy said...

So, in the USA (and wherever else), wages (all earnings other than earnings on capital?)are HIGHER than they ought to be, even though most people earning a wage don't own capital? Seems the propertyless worker must be getting this power from the government, but with so many people above the minimum wage, this doesn't seem to explain it, unless, somehow, inflation resulting from government actions is a big factor.

Michael D. Greaney said...

It's a combination of more things than can be explained in a single posting or comment, but basically it's due to the fixed idea inherent in Keynesian economics that wages and welfare are the only source of income for most people, and that past savings are the only source of financing...past savings being defined as cuts in consumption.

That being the case, the tax system, the financial system, government monetary and fiscal policy, union strategies, and a number of other factors all combine to try and increase wages and savings...which increases costs, starting a vicious circle that leaves the wage earner with less real income than before, because the "forced savings" goes not to the wage earner who cut consumption as a result of higher prices, but to the producers in the form of higher profits, presumably to be used to finance new capital and create jobs...which doesn't happen, because 1) it's invested in technology which eliminates jobs, or 2) it's siphoned off into the stock market, which is giving greater speculative returns than productive activity.